Stocks, cryptos and metals jump after escalating tensions in Iran, while Brent and WTI jump on supply fears.
Global markets sent shockwaves through stocks, crypto assets and commodities on Tuesday as the war between the United States and Iran escalated, with oil emerging as the sole beneficiary of the geopolitical turmoil.
The S&P 500 fell 2.2%, while the Nasdaq Composite fell 2.1% and the Dow Jones Industrial Average fell more than 2.3%. Energy stocks bucked the trend and gained as oil prices rose.
Digital assets reversed course after Monday’s rally. Bitcoin fell about 3%, from around $70,000 to around $67,000. Ethereum fell 4% to around $1,940 and Solana lost 4% to trade near $83.50.
Precious metals suffered heavy losses despite their traditional safe-haven appeal. Gold fell more than 5% to $5,000 an ounce, while silver rose nearly 10% to $80.
Crude oil defied broader risk sentiment. Brent rose 7.3% to $84 a barrel and West Texas Intermediate rose 8.4% to above $77.
The rally in energy and oil prices followed a statement by a commander of Iran’s Revolutionary Guards on Monday that he would close the Strait of Hormuz, a key global oil transit point, and warn that ships attempting to cross would face military action.
The conflict intensified for the fourth day in a row. According to reports, drone strikes hit the US embassy in Riyadh as Iranian forces ramp up regional operations.
The State Department ordered the evacuation of diplomatic personnel from Bahrain, Iraq and Jordan. Hezbollah, with the support of Tehran, carried out missile attacks and drone attacks in the direction of Tel Aviv.
Defense analysts have expressed concern over whether Gulf states, including the United Arab Emirates, can sustain prolonged aerial bombardment given the strain on their missile interceptor systems.
President Donald Trump has hinted that the conflict could drag on for more than four weeks, deepening uncertainty in financial markets around the world.
