Financial markets around the globe faced a jarring start to the week as the fallout from the U.S. and Israeli bombardment of Iran over the weekend rippled through trading floors, sending oil prices soaring and stock futures tumbling. The escalation—marked by the death of Iran’s Supreme Leader Ali Khamenei in an airstrike and a series of retaliatory attacks across the Middle East—has injected a fresh dose of geopolitical and economic uncertainty into an already fragile investment landscape.
On the evening of March 1, 2026, U.S. stock futures pointed sharply downward, with the Dow Jones Industrial Average futures falling 353 points, or 0.72%, the S&P 500 futures down 0.68%, and Nasdaq futures losing 0.79%, according to data reported by Fortune. Asian shares also reflected the turmoil, dropping 1.4%, while U.S. equity-index futures slipped 0.7% as investors digested the news of missile strikes on Tehran and conflicting reports about possible nuclear negotiations between Iran and the United States, as noted by Bloomberg.
The mood in markets was distinctly risk-off, but not panicked. "The cross-asset moves are orderly, and the more outsized volatility appears largely contained to the energy complex," Chris Weston, head of research at Pepperstone, told Business Insider. Still, the energy sector was where the shockwaves were most acutely felt. Brent crude oil, the international benchmark, spiked as much as 10% in over-the-counter trading earlier Sunday, breaching $80 a barrel before settling around $77.15—a 5.9% gain—by the close of U.S. trading. West Texas Intermediate (WTI) crude jumped 7% at the open and was last seen up 5.6% at $70.77 a barrel, as reported by Reuters and Business Insider. The surge in oil prices was driven by fears that Iran, which pumped 4.7 million barrels per day last year (about 4.4% of global supply), could choke off the Strait of Hormuz, a vital shipping route through which a fifth of the world’s oil passes.
The Islamic Revolutionary Guards Corps (IRGC) escalated tensions by warning ships against passage through the strait and claiming to have struck three oil tankers with missiles. Hundreds of tankers carrying oil and liquefied natural gas dropped anchor or remained stationary near the Strait of Hormuz, with shipping giants like Maersk suspending all vessel crossings until further notice. Greece’s shipping ministry advised vessels to avoid the Persian Gulf, Gulf of Oman, and the strait itself. "The immediate price shocks are being accompanied by a fresh wave of supply chain disruptions. This isn't just a question of whether the Straits of Hormuz are physically closed; the logistical friction is already here," economist Mohamed El-Erian wrote in a note cited by Business Insider. Global shipping costs ballooned in the aftermath of the attacks, with Barclays analysts describing the situation as the "worst fears" for oil markets.
Asia, in particular, stands to suffer the most from a prolonged closure of the Strait of Hormuz. Most economies in the region are heavily dependent on oil imports routed through these lanes. "Qatar has the world's third-largest LNG export capacity, and ~20% of global LNG trade transits the Strait of Hormuz (primarily Qatari volumes), which makes shipping risk a gas-market event as much as an oil-market event," strategists at Franklin Templeton wrote.
While energy prices soared, other safe-haven assets also saw inflows. Gold climbed as much as 3.1% to $5,410 per troy ounce, while silver rose 1% to $94.25. The U.S. dollar index, which measures the currency against a basket of major rivals, rose 0.3%. The yield on the 10-year Treasury ticked up slightly to 3.97%. Bitcoin, often viewed as a risky asset, tumbled over 2% to around $66,239 on Sunday evening, reflecting broader risk aversion in the markets.
President Donald Trump, speaking on Sunday, warned that more casualties from Operation Epic Fury were likely and that the bombing campaign would continue "as long as necessary to achieve our objective of PEACE THROUGHOUT THE MIDDLE EAST AND, INDEED, THE WORLD!" according to his social media statement cited by The New York Times. However, Trump also told the Times that he was open to lifting sanctions on Iran if a new leadership—replacing the now-deceased Khamenei—emerged as a pragmatic partner. Meanwhile, Iran’s national security chief, Ali Larijani, declared that the country would not negotiate, contradicting some reports of renewed nuclear talks.
Retaliatory strikes by Iran over the weekend targeted U.S. and Israeli interests in Bahrain, Qatar, and the UAE, further stoking fears of a broader regional conflict. The closure—or even the threat of closure—of the Strait of Hormuz has already led to a significant freeze in ship traffic, with hundreds of oil and gas tankers stationary and major shipping companies halting operations through the region. "Even without a full shutdown, higher war-risk premia, rerouting and insurance repricing can keep crude and freight costs elevated," Charu Chanana, Chief Investment Strategist at Saxo, told Investopedia.
OPEC+, the cartel of oil-producing nations, attempted to calm markets by announcing a planned increase in oil production by 206,000 barrels a day starting in April, up from its previous monthly increments of 137,000 barrels. Yet, as Alan Gelder of Wood Mackenzie pointed out, "There is, however, a risk that the OPEC+ decision is moot if flows do not resume through the Strait of Hormuz." The specter of $100 per barrel oil looms if Iranian actions fully close the strait, a scenario reminiscent of the immediate aftermath of Russia’s invasion of Ukraine in 2022, when oil prices soared to $125 a barrel.
For investors, the uncertainty has prompted a defensive stance, particularly in Asian currency markets where the Australian dollar—a bellwether for risk sentiment—fell about 0.28%. Yet, as Idanna Appio of First Eagle’s Global Income Builder fund noted, "I don’t think this feels like a liquidity type event." The impact on sovereign risk in the Gulf, while notable, is mitigated by strong balance sheets in countries like Bahrain, Qatar, and the UAE. Some analysts even see a potential buying opportunity emerging, depending on how the conflict evolves.
Looking ahead, markets face a busy week for economic indicators, with the Institute for Supply Management’s manufacturing activity index, ADP’s private-sector payrolls, the Federal Reserve’s beige book, and the Labor Department’s monthly jobs report all on tap. But for now, the focus remains squarely on the Middle East. As Franklin Templeton’s Stephen Dover summed up, "Historically, geopolitics often produce an initial jump in risk premia before investors conclude the aggregate earnings hit is modest." Still, he cautioned, "We would not yet label this a clean buy-the-dip setup—duration, shipping/insurance mechanics, and the endgame matter more than the first headline."
With the conflict’s outcome and its economic aftershocks still uncertain, investors and policymakers alike are bracing for a volatile period ahead—one where every headline from the Persian Gulf could send new tremors through the world’s financial markets.