Global financial markets witnessed sharp volatility on Monday after Iran launched multiple missile strikes toward Israel, escalating tensions in West Asia and raising concerns about disruptions to global energy supplies.
Following the attack, crude oil prices surged nearly 4 percent, with West Texas Intermediate (WTI) crude rising above $93 per barrel and Brent crude crossing $96 per barrel. Investors rushed to safe-haven assets amid fears that the renewed conflict could impact oil production and transportation routes in the region.
The escalation comes after Iran reportedly carried out missile strikes in response to Israeli actions in Lebanon, threatening a fragile ceasefire that had previously reduced tensions in the region.
Asian stock markets reacted negatively to the geopolitical uncertainty. South Korea’s Kospi index suffered the steepest decline, falling as much as 8 percent during early trading before recovering some losses. Japan’s Nikkei 225 also dropped sharply, losing around 3 percent amid broad-based selling in technology and export-oriented stocks.
The US dollar remained strong, with the Dollar Index holding near the 100 mark after gaining more than 1 percent last week. Strong US employment data has reinforced expectations that the Federal Reserve may keep interest rates elevated for a longer period, adding further pressure on global markets.
Despite the latest conflict, US President Donald Trump expressed optimism about ongoing diplomatic efforts with Iran and suggested that a broader agreement could be close. Reports indicate that he intends to urge restraint from both sides in an effort to prevent further escalation.
The uncertainty has already weighed heavily on Wall Street. US stock markets ended the previous session significantly lower, erasing nearly $2 trillion in market value. The Dow Jones Industrial Average declined 1 percent, the S&P 500 fell 2.4 percent, and the Nasdaq Composite dropped 4 percent.
Technology stocks led the decline, with major companies including Nvidia, Alphabet, Meta Platforms, and Broadcom facing substantial selling pressure.
Market participants are now closely monitoring developments in the Middle East, as any further escalation could have significant implications for energy prices, inflation, and global economic growth.