On Monday, the US stock market declined. By the end of the session, the Dow Jones (US30) fell by 1.13%, the S&P 500 (US500) dropped 0.41%, and the Nasdaq (US100) closed 0.19% lower. The market came under pressure from a sharp rise in oil prices amid escalating conflict in the Middle East, which intensified investor concerns about further inflation acceleration. Tensions surged after an exchange of strikes between the US and Iran. The situation worsened following statements from Donald Trump about plans to ensure safe navigation in the Strait of Hormuz, to which Tehran responded with threats against US forces. Against this backdrop, commodity and industrial sectors performed the worst, while energy companies posted gains.

European stock markets fell sharply amid escalating US-Iran tensions, which heightened fears of an energy crisis and its economic consequences. Germany’s DAX (DE40) dropped 1.24%, France’s CAC 40 (FR40) closed 1.71% lower, Spain’s IBEX 35 (ES35) declined 2.39%, and the UK’s FTSE 100 (UK100) slipped 0.14%. Eurozone and pan‑European indices came under pressure as rising geopolitical tensions triggered another spike in oil prices and tightened financial conditions. Reports of mutual attacks and military actions in the Persian Gulf increased uncertainty, pushing bond yields higher and strengthening expectations of further ECB tightening. The banking sector suffered from rising borrowing costs, while higher electricity prices weighed on industrial and tech companies. An additional negative factor was the US announcement of new tariffs on European cars, which dragged down automaker stocks and deepened the market sell‑off.
WTI crude rose about 3%, approaching $105 per barrel amid a sharp escalation in the Middle East. The trigger was a confrontation between US and Iranian forces near the Strait of Hormuz: according to US reports, Iran launched cruise missiles at military and commercial vessels, while American forces intercepted drones and small boats to protect shipping routes. Additional concerns were fueled by reports of intercepted missiles, a fire at the Fujairah oil terminal, and a drone strike on a tanker near the strait – one of the first significant incidents involving infrastructure in recent weeks.

Silver fell more than 2%, dropping toward $73 per ounce and partially correcting its previous rally. The metal came under pressure from rising geopolitical tensions, which revived fears of accelerating inflation. The prolonged conflict has already driven energy prices sharply higher, increasing the risk of prolonged or even tighter monetary policy. Since the start of the confrontation, silver has lost roughly one‑fifth of its value.

In Asia, Japan’s Nikkei 225 (JP225) and China’s FTSE China A50 were closed on Monday. Hong Kong’s Hang Seng (HK50) jumped 1.24%, while Australia’s ASX 200 (AU200) fell by 0.37%.

On Tuesday, the Australian dollar (AUD) fell to 0.71 USD, losing support after the Reserve Bank of Australia meeting. Although the RBA raised the cash rate for the third consecutive time, by 25 basis points to 4.35%, the highest since the post‑pandemic spike, the regulator’s tone was softer than expected. The decision passed with an 8-1 vote, but policymakers hinted at a possible pause and a “data‑dependent” approach, disappointing AUD buyers who expected a stronger signal for continued tightening. Geopolitical tensions added further pressure: the threat of escalation in the Strait of Hormuz and renewed oil supply disruptions triggered a flight to the US dollar as a safe‑haven asset.

The New Zealand dollar (NZD) fell to 0.586 USD amid a sharp escalation of the geopolitical crisis. A direct military clash between US and Iranian forces in the Persian Gulf, with the involvement of the UAE, jeopardized the four‑week ceasefire and crushed investor appetite for risk assets. Market attention is now focused on Wednesday’s release of New Zealand’s Q1 labor‑market report. Investors are trying to assess how severely the national economy has been affected by the energy shock.