JERUSALEM – FEBRUARY 28: People take shelter as Iran fires missiles and drones towards Israel after a US-Israeli attack in Jerusalem on February 28, 2026.
Mostafa Alkharoof | Anadolu | Getty Images
The US and Israel launched their most aggressive strikes on Iranian targets over the weekend, killing the Islamic State’s longtime supreme leader Ayatollah Ali Khamenei, plunging the region into wider conflict as Tehran retaliated with airstrikes across the Middle East.
Here’s what we know investors will face when markets open after the weekend.
Iran’s Supreme Leader is assassinated
Iran’s state media announced Khamenei’s death early Sunday morning.
Trump made the biggest foreign-policy gamble of his presidency ahead of midterm elections in November, calling the assassination “the single biggest opportunity for the Iranian people to take their country back.”
Trump warned on Truth Social that “Heavy and precision bombing will continue unabated throughout the week or as long as necessary to achieve our mission of peace through the Middle East and indeed, the world!”
The president said on Saturday that the offensive strikes are aimed at ending a decades-long threat from Iran and ensuring that it cannot develop a nuclear weapon.
Missiles were fired at Gulf countries
Iran retaliated with an unprecedented wave of attacks across the Middle East, targeting several nearby countries that host US military bases and Israel.
In Israel, sirens and mobile-phone alerts sent people rushing to air-raid shelters as Iran launched a series of missile barrages that were largely intercepted.
Explosions were reported in the United Arab Emirates, Jordan, Qatar and Bahrain, Saudi Arabia, while footage showed people fleeing smoke-filled runways at Dubai International Airport.
Drone attacks caused damage and injuries at Dubai International Airport and Abu Dhabi’s Zayed International Airport.
It comes after Iran’s foreign ministry said in a statement on Saturday that the country would “not hesitate” in response to US-led strikes. Separately, a spokesman for Iran’s armed forces is reported to have warned that “we will teach Israel and the US a lesson they have never experienced in their history.”
In a Truth Social post on Sunday, Trump warned Tehran against further retaliatory moves, threatening to “hit them with unprecedented force” if Iran continues the strike.
Market hedges
Investors headed for risk-off trades after markets reopened after the weekend, expecting potential gains in so-called safe-haven assets such as the US dollar and gold, but stocks could pull back.
Perpetual swap futures for oil jumped nearly 5% to $71.7 a barrel, while gold rose roughly 1.2% to $5,334 per troy, giving some indication of how markets might react on a crypto-exchange hyperliquid that allows 24/7 trading.
Within hours of the bombardment on Saturday, Bitcoin started to recover some losses to finish the day 1.8% higher at $66,725. The cryptocurrency slipped to $66,325 as of 4:48 a.m. EST on Sunday.
Oil moves
Oil market participants are closely watching the conflict, which could cause a major oil supply shock in the Middle East.
Former President George W. Bob McNally, a former Bush White House energy adviser, predicted that crude futures prices could rise by $5 to $7 per barrel if there is no sign of an acceleration.
Brent is raw
Iran, the fourth-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), and the Strait of Hormuz, a narrow waterway connecting the Persian Gulf and the Arabian Sea, are at risk of making commercial traffic unsafe. This could push oil prices above $100 per barrel, McNally said.
More than 14 million barrels per day flowed through the Strait in 2025, or one-third of the world’s total seaborne crude exports. Three-quarters of those barrels went to China, India, Japan and South Korea. China, the world’s second largest economy, gets half of its crude imports from the Straits.
Investors reassess risk
For markets, the key question is what happens next.
Eric Robertson, global head of research at Standard Chartered, said in a note that investors have already discounted geopolitical risk.
The US dollar has been modestly weaker year-to-date, but the spread beneath the surface is telling: Commodity-linked currencies are doing well, he said, suggesting markets are exposed to scarce resources and terms-of-trade winners.
Ben Emmons of FedWatch Advisors argued that leadership strikes in Tehran raise regime-change tail risks and leave an uncertain endgame. Markets can swing between risk-on relief — if regime collapse removes the threat of oil embargoes or nuclear escalation — and risk-off persistence if the conflict drags on and supply disruptions intensify, he said.
An immediate pressure point may be energy. A sustained rise in crude prices will quickly ripple through inflation expectations and hit Asia’s oil-importing economies hard, analysts say.
As trading resumes, oil prices and how the US dollar trades against Asian currencies will be the first real sign of how seriously this shock has been priced in.
Travel chaos
Airlines canceled hundreds of flights, while dozens were rerouted midway due to closed airspace over a large swath of the Middle East. Some services have been suspended until at least the end of next week.
Travel confusion has spread as far as Brazil and Australia. The airspace closure forced carriers to scrub flights that normally service the area.
More than 1,800 flights in and out of Middle Eastern countries were canceled on Saturday, with another 1,400 flights in and out of the region on Sunday, according to aviation data firm Sirius.
Qatar Airways said it was temporarily suspending all flights, while Dubai-based Emirates said services at Dubai International Airport, one of the world’s busiest airports, were suspended.
— CNBC’s Spruha Srivastava, Spencer Kimball, Pippa Stevens and Leslie Josephs contributed to this story.
(tags to translate)Asia Economy
