The escalation of the Israel-Iran conflict has caused significant waves in the global economy, impacting stock markets and commodity prices.
Stock Markets React to Middle East Tension
Global stock markets quickly reflected rising tensions. U.S. futures dropped sharply Friday morning, with DOW futures down nearly 600 points. The S&P 500 and NASDAQ also sank by over 1.5%. Investors shifted away from riskier assets, fearing that retaliation from Iran could drag the U.S. or its allies into deeper conflict. European stock markets mirrored this panic. Futures tied to Germany’s DAX and the UK’s FTSE 100 fell, with losses ranging from 0.5% to 1.7%. Asia wasn’t spared either—the Nikkei in Japan and Kospi in South Korea both retreated.
Oil Prices Surge Amid Supply Concerns
The price of oil skyrocketed as news of the attack spread. Israel struck Iran’s Natanz facility—a critical part of its nuclear infrastructure—but did not target oil production. Still, fears of supply disruptions pushed Brent crude and West Texas Intermediate up over 8%, marking the biggest daily gain in years. While Iran hasn’t shut down any oil routes, analysts worry it could use the Strait of Hormuz as leverage, considering that nearly 20% of the world’s oil flows through that narrow waterway.
Gold Becomes the Go-To Safe Haven
When conflict hits, investors usually turn to gold—and this time was no different. The precious metal surged nearly 1% as fear gripped markets. Gold tends to perform well in uncertain times because it’s seen as a stable store of value. With the threat of war looming, gold may continue to shine. The asset’s recent price jump reflects how nervous traders have become. If Iran retaliates and more regional powers get involved, gold could reach new highs.
The Israel-Iran conflict has once again highlighted the fragility of the global economy. From oil to gold, every asset class is feeling the heat, and investors should brace for more swings in the coming days.
