Middle East Conflict Ignites Global Markets: Oil Surges, Equities Tumble Amid Supply Fears

Major indices across the U.S., Europe, and most of Asia saw declines, with S&P 500 and Dow futures falling approximately 1%, Germany's DAX down 1.9%, and Hong Kong's Hang Seng losing 2.1%. Concurrently, energy prices surged, with U.S. benchmark crude rising over 8% to $72.70 per barrel and Brent crude jumping 9% to nearly $79.19.

Natural gas futures also climbed 6%, and fuel for transportation spiked over 14%. This sharp increase in energy costs is largely attributed to fears of disrupted oil and LNG flows through the critical Strait of Hormuz, which handles one-fifth of global energy shipments.

Iran's 1.6 million barrels per day of oil exports, primarily to China, are now at risk. Investors sought safety in gold, which rose 3.1% to $5,408.10 per ounce, and the U.S. dollar strengthened.

Travel-related stocks tumbled, while defense shares in Japan advanced. Adding to market fragility, a higher-than-expected U.S. wholesale inflation report (2.9% vs.

1.6% forecast) suggests the Federal Reserve may delay interest rate cuts, further dampening economic outlooks.