Stocks slide as oil surges on Middle East escalation
Global markets came under pressure after a sharp escalation in the Iran conflict sent energy prices higher and rattled investor sentiment.
US President Donald Trump said Israel had “violently lashed out” by striking Iran’s South Pars gas field, prompting Iran to retaliate with missile attacks on Qatar and Saudi Arabia.
Trump warned that the US would “massively blow up” the South Pars field if Iran carried out further strikes on Qatar.
Energy markets reacted immediately. Brent crude jumped more than 5% to above $113 a barrel, while natural gas prices rose around 3%, intensifying concerns over supply disruption.
Equity markets fell across the board. Japan’s Nikkei 225 dropped more than 3%, while South Korea’s benchmark index declined 2.8%. The MSCI Asia-Pacific index (ex-Japan) fell over 2.5%, and European markets were set to open down more than 1.5%.
In currency markets, the US dollar continued to attract safe-haven demand, with the dollar index up 2.5% since the conflict began, though it edged slightly lower after a recent gain.
Wall Street also closed sharply lower. The S&P 500 fell 1.4% to 6,624.70, while the Nasdaq Composite dropped 1.5% to 22,152.42. The Dow Jones Industrial Average declined 1.6% to 46,225.15, marking its lowest close of 2026.
The sell-off was driven by a combination of rising energy prices and renewed inflation concerns, after the Federal Reserve opted to keep interest rates on hold at 3.75%.
Investors remain wary that further attacks on energy infrastructure could push oil and gas prices even higher, complicating the outlook for inflation, monetary policy and global growth.
