On Wednesday, US stock indices closed in the red amid the escalating conflict in the Persian Gulf. By the end of the trading session, the Dow Jones (US30) fell by 0.61%. The S&P 500 (US500) decreased by 0.08%, while the technology-heavy NASDAQ (US100) edged up by 0.03%. The primary trigger for the decline was new reports of tanker attacks near the Strait of Hormuz, which sparked a surge in WTI oil prices to $87 per barrel, despite the IEA’s emergency decision to release a record 400 million barrels from strategic reserves.

Published inflation data (CPI) for February aligned with analysts’ expectations, showing a 2.4% year-on-year increase. Nevertheless, the bond market reacted with rising Treasury yields as traders fear that the March spike in gasoline prices and logistical chaos will make February’s figures a “relic of the past.” The probability that the Fed will refrain from rate cuts throughout 2026 has risen to 19.3%, with the first potential policy easing now shifted to September.

The Canadian dollar (CAD) showed strong appreciation, rising above the 1.36 mark against the US dollar. The main growth driver was the sustained high cost of WTI crude, which consolidated above $87 per barrel during trading, highlighting Canada’s status as the most stable and secure energy supplier for the North American region. The “loonie” received additional support from the contrast between US and Canadian macroeconomic data. While the US labor market showed signs of cooling (an unexpected loss of 92,000 jobs leading to a drop in the Dollar Index), the Canadian economy appears more resilient. Canada’s unemployment rate fell to 6.5% in early 2026, a 16-month low.

European stock markets turned sharply downward, almost entirely erasing the optimism of the previous session. The German DAX (DE40) fell by 1.37%, the French CAC 40 (FR40) closed down 0.19%, the Spanish IBEX 35 (ES35) dropped 0.53%, and the British FTSE 100 (UK100) finished 0.56% lower yesterday. The primary pressure factor was the growing positive correlation between stocks and government bonds: investors sold off both asset classes amid fears that the energy shock would lead to a prolonged period of high inflation, forcing the ECB to hike rates.

The Swiss franc (CHF) traded around 0.78 against the US dollar on Wednesday, continuing to hold near record highs. Its “safe-haven” status ensured a powerful capital inflow for the franc amid the twelfth day of active hostilities in Iran and the de facto blockade of the Strait of Hormuz. Investors are ignoring risky assets in favor of the Swiss currency, viewing it as protection against global uncertainty. However, for the Swiss economy itself, such strength in the national currency is becoming a serious challenge. In response, the SNB moved from words to action: sight deposit data indicate that the regulator has already begun conducting foreign exchange interventions, buying foreign currency to weaken the franc.

On Thursday, the oil market entered a phase of extreme volatility: WTI futures jumped to $95 per barrel, gaining more than 8% in a single session. This rapid rise occurred against the backdrop of dramatic news from Iraq, where authorities were forced to completely suspend operations at oil terminals. The cause was attacks on two tankers in Iraqi territorial waters – the vessels were struck by explosive-laden drone boats and caught fire. This incident clearly confirmed that the risk zone in the Persian Gulf has expanded far beyond the Strait of Hormuz, encompassing the region’s key export hubs. The market’s reaction to the IEA’s decision to release 400 million barrels proved short-lived. Investors quickly concluded that even such massive interventions are merely a “temporary bandage” against the backdrop of a full blockade of the strait and production cuts by leading regional producers who no longer have storage space for oil that cannot be exported. The situation is exacerbated by Iran’s hawkish rhetoric: the republic’s military command openly warned the world of the prospect of $200 per barrel oil if the US and Israel do not cease their strikes.

Asian markets traded with mixed dynamics. The Japanese Nikkei 225 (JP225) rose by 1.43% during the session, the FTSE China A50 (CHA50) jumped 0.98%, Hong Kong’s Hang Seng (HK50) fell by 0.24%, and the Australian ASX 200 (AU200) showed a positive result of 0.59% on Wednesday.

On Thursday, a wave of sell-offs swept the Australian stock market: the S&P/ASX 200 Index fell by 1.3%, breaking a two-day recovery period. Investors were spooked by the new round of rising oil prices, which, combined with hawkish rhetoric from RBA officials, made an interest rate hike next week almost inevitable. As a result, the market instantly repriced the odds of a March 17 rate hike: the probability is now estimated at 75% (up from 30% at the start of the week). The country’s largest banks, including CBA, Westpac, and ANZ, simultaneously revised their predictions, expecting rate hikes in March and May to a peak level of 4.35%.