Global markets opened with "no panic": the three major U.S. stock index futures all fell 1%, oil prices jumped 13% but the gains fell significantly, and gold approached $5,400

By Dong Jing

Source: Wall Street CN

The core of this round of market turmoil lies in the shock to global crude oil supplies. Brent crude surged as much as 13% early in the session before paring gains sharply, with price action milder than expected. News of the effective closure of the Strait of Hormuz has sent the global crude market into violent turmoil. Estimates suggest that should the Strait of Hormuz remain blocked, oil prices could surge to **$108 per barrel**.

Escalating tensions in the Middle East have put markets on high alert, but the initial sharp volatility seen at the Sunday night futures open has eased noticeably. Oil gains narrowed from a peak of 13% to 8.5%, while U.S. stock futures also recovered some ground from session lows. Markets have not yet seen systemic panic, but analysts warn that the real stress test is yet to come as Asian markets open one after another.

Oil was the clearest bullish signal at the open. Crude futures spiked more than 13% at the start of trading, but were quickly hit by profit-taking, with gains rapidly narrowing to around 8%. Gold and silver rose in tandem, both climbing more than 1%, though the moves appeared relatively mild given recent volatility across commodity markets. The U.S. dollar strengthened in early trading, but momentum faded at the margin, even as the greenback remains the clearest thematic trend in foreign exchange.

Notably, Bitcoin has shown **unusual resilience** in this episode. The asset has typically come under pressure first during risk events, but this time it has not only avoided selling but even risen over the weekend, holding positive territory in night sessions.

U.S. stock futures are down roughly 1%, having rebounded significantly from their opening lows. Analyst Mark Cudmore noted that most non‑energy assets have seen contained volatility and have generally pulled back from extreme opening levels.

Analysts point out that as markets across Asia open, liquidity depth will rise sharply, and directional pressure may intensify accordingly. The **KOSPI** has been flagged as a potential focal point of risk exposure. The index has rallied roughly 50% so far this year, driven mainly by memory chip trades, with valuations already at elevated levels. Should sentiment shift, this crowded trade could face heavy correction pressure, with spillover effects across broader Asian markets.

As reported earlier by Wall Street CN, the United States and Israel launched a joint massive military strike, killing Iran’s Supreme Leader Ali Khamenei — a geopolitical shock unseen in decades. In crypto markets, the only asset class open continuously over the weekend, prices completed a V‑shaped reversal from a sharp drop to a strong rebound, reflecting deep investor division over the conflict’s path.

## Key Market Moves

- S&P 500 futures: -1.05%; Dow futures: -1.16%; Nasdaq 100 futures: -1.06%

- Australia S&P/ASX 200: -0.4%; MSCI Asia Pacific Index: -1.1%

- Japan Topix Air Transport Index: -4.2%; Japan Mining Index: +3.5%

- Bloomberg Dollar Spot Index: nearly flat

- Euro: -0.3% to $1.1781

- Japanese yen: -0.2% to 156.35 per dollar

- Australia 10-year government bond yield: -4 bps to 4.61%

- Brent crude futures: +7.5% to $78.33/bbl

- WTI crude: +7.3% to $71.94/bbl

- Spot gold: +2% to $5,388.23/oz

- Spot silver: +1.5% to $95.23/oz

- Bitcoin: +0.2% to $65,831.73

- Ethereum: +0.4% to $1,937.81

**08:17**

European stock futures turned lower: Euro Stoxx 50 futures -1.6%, DAX futures -1.7%.

**08:02**

10-year U.S. Treasury yield fell to its lowest level since April 2025.

## Oil Shock: Strait of Hormuz Becomes Global Energy Chokepoint

Crude futures were the most volatile asset at the open. Prices surged more than 13% at the start of trading, reflecting immediate market pricing of supply disruption risks in the Middle East. However, profit-taking quickly emerged, compressing gains to around 8.5% within a short period.

This price action suggests some traders chose to lock in profits during the extreme opening move rather than chase gains further. Historically, oil spikes triggered by geopolitical events often pull back before the actual impact on supply becomes clear.

The core of this round of market turmoil is the shock to global crude oil supplies. The Strait of Hormuz carries about one‑fifth of the world’s oil flows, making it an irreplaceable energy artery.

Data signals show tanker traffic through the strait has **nearly stalled**, with three vessels attacked near the mouth of the Persian Gulf, sharply stoking fears of tightening supply.

Iran has stated it has no intention of formally closing the strait, but markets are reacting cautiously. Dilin Wu, strategist at Pepperstone, noted:

> “Even if the Strait of Hormuz is not officially closed, vessel diversions and a sharp rise in insurance rates have effectively tightened supply. This alone is enough to inject fresh inflationary pressure into the global economy.”

Bloomberg Economics calculations further quantify this risk: should a closure materialize, oil prices could surge to **$108 per barrel**. Sustained higher energy prices would have far‑reaching effects on a global economy already facing inflationary pressure.

## Multiple Pressures Compound, Equities Under Stress

This geopolitical conflict is not taking place amid calm conditions. Dec Mullarkey, Managing Director at SLC Management, said:

> “All this is happening at a fragile moment, and investors are growing increasingly cautious. U.S. equities are already highly sensitive to tech disruption risks and credit pressures. The prospect of higher commodity prices could force investors to scale back risk exposure further and trigger selling.”

Adam Hetts, Global Head of Multi-Asset at Janus Henderson, wrote in a research note:

> “The U.S.-led strike on Iran has pushed oil higher and reignited geopolitical risk. Our view is that markets are currently pricing a limited conflict. Unless the situation evolves into a prolonged standoff, the impact on broader investments remains contained. As always, diversification and a long-term view matter most when uncertainty peaks.”

Notably, markets have shrugged off geopolitical tensions several times before — when the U.S. struck Iranian nuclear facilities last June, stocks barely reacted. But Ajay Rajadhyaksha, Chairman of Global Research at Barclays, warned that this conflict’s scale and potential global economic impact are far larger than prior episodes, and investors should not rush to buy the dip.

> “The risk-reward is not attractive. If stocks correct meaningfully — say, the S&P 500 falls more than 10% — a buying opportunity may emerge, but that time is not now.”

## Treasuries Face Dilemma, Market Direction Unclear

Geopolitical conflict has also put U.S. Treasury market momentum in a contradictory position.

Heightened safe-haven demand should theoretically push capital into bonds and press yields lower; but sustained oil price gains, if passed through to broader inflation expectations, would exert upward pressure on yields. These opposing forces have complicated the investment case for Treasuries.

Michael Ball, Bloomberg macro strategist, noted: “The instinctive market reaction to weekend events will be to avoid risk. Buying appetite on dips is likely to be subdued until the scale and duration of the conflict become clearer.”

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