Middle East Conflict Fuels Risk-Off, Global Stocks Tumble

This market reaction followed President Trump's warning to Iran regarding the Strait of Hormuz and Iran's retaliatory threats. Brent crude rose 1.5% to $113.88 a barrel, and WTI was up 3.5% to $98.06 a barrel.

European natural-gas prices surged 3.9% to 61.58 euros a megawatt-hour, up over 90% this month, due to Strait of Hormuz disruptions and severe damage to Qatar's LNG facility. U.S. equity futures for the Dow Jones Industrial Average, S&P 500, and Nasdaq were down 0.5%, 0.6%, and 0.7% respectively.

Asian markets saw sharp declines, with South Korea's Kospi closing 6.5% lower, Japan's Nikkei Stock Average down 3.5%, and China's Shanghai Composite falling 3.6%. European stocks also fell, with the Stoxx 600 down 1.7%, Germany's DAX sliding 1.9%, and the U.K.'s FTSE 100 and French CAC 40 both falling around 1.5%.

The dollar strengthened, with the DXY dollar index rising 0.2% to 99.812, benefiting from its safe-haven status and U.S. energy independence. U.S. 10-year Treasury yields rose to 4.423%, the highest since July 2025, and U.K. gilt yields hit levels not seen since 2008.

Precious metals, surprisingly, did not act as a safe haven; gold futures dropped 9.5% to $4,132.90 a troy ounce, silver fell 11.5%, and platinum was down 11%. Investors anticipate March PMI prints on Tuesday for insights into the conflict's economic impact.