With U.S. airstrikes hitting three Iranian nuclear sites over the weekend, global financial markets are on edge — but the reaction, so far, has been surprisingly measured.
Markets Show Caution, Not Panic
Wall Street futures rebounded modestly Monday morning. The S&P 500 futures were up 0.23%, Nasdaq futures rose 0.28%, and Dow futures added 0.09%, reflecting cautious optimism amid uncertainty.
Carol Kong, strategist at the Commonwealth Bank of Australia, said, “The price action has been muted so far as markets wait and see how Iran responds”.
Charu Chanana, market strategist at Saxo, noted that “markets appear to be treating the U.S. strikes on Iran as a contained event … not a disruption to global oil supply or trade”.
Oil Surges: The Main Risk Factor
Oil markets, however, remain highly sensitive. Brent crude briefly rose over 2%, reaching $77.90 per barrel, while West Texas Intermediate (WTI) touched $74.80.
Iran has threatened to block the Strait of Hormuz — a chokepoint for nearly 20% of global oil flow. According to the U.S. Energy Information Administration (EIA), about 21 million barrels of oil per day pass through the Strait.
Shell CEO Wael Sawan warned: “A potential blockage of the Strait of Hormuz … would have significant ramifications,” adding that energy-transport costs have already doubled.
Meanwhile, AAA reported that gas prices in California rose by 12 cents in 48 hours, reaching $5.14 per gallon — a potential early sign of transmission to consumer inflation.
The Iranian parliament has called for considering a closure of the strait, although final decisions rest with its Supreme National Security Council.
Safe Havens Gain Attention
Gold initially jumped to $2,375 per ounce before settling near $2,340. The U.S. dollar index (DXY) rose 0.46%, reaching 104.9, as investors sought stability.
U.S. 10-year Treasury yields dropped to 4.22% from 4.30% late last week, signaling a shift to risk-off positioning. The iShares 20+ Year Treasury Bond ETF (TLT) saw inflows of over $520 million in two trading sessions.
If inflation resurges due to rising oil prices, the Federal Reserve could be forced to reassess its interest rate pause, currently at 5.25%–5.50%.
Defense and Cybersecurity on Investors’ Radar
Defense contractors like Lockheed Martin (LMT), Raytheon (RTX), and Northrop Grumman (NOC) have seen mild upticks, as noted by Bloomberg’s defense sector tracking.
Cybersecurity stocks such as CrowdStrike (CRWD) and Palo Alto Networks (PANW) are also under close watch, given increased cyber risk levels. The FBI recently raised alert levels for key sectors amid fears of retaliatory cyberattacks.
Tech, Retail, and Risk-Off Sectors Could Suffer
Growth-heavy sectors like technology may be more vulnerable in a prolonged conflict due to their reliance on global supply chains and investor sentiment. While real-time market data is still developing, analysts from Goldman Sachs expect pressure on companies such as Nvidia (NVDA) and Tesla (TSLA) should geopolitical tensions escalate.
Consumer discretionary stocks may also underperform, particularly in travel and luxury sectors. ETFs like the SPDR S&P Retail ETF (XRT) could see volatility, along with companies like Booking Holdings (BKNG) and Marriott International (MAR), given potential impacts on consumer confidence and international travel demand.
(Exact share movement figures have been omitted due to verification constraints at the time of writing.)
Global Repercussions
European and Asian markets have already shown signs of stress. Japan’s Nikkei dropped 0.6%, Germany’s DAX fell 0.4%, and India’s Sensex lost 0.9%. South Korea’s Kospi index slipped 0.5% as oil price fears loomed.
Emerging markets risk capital outflows. The MSCI Emerging Markets Index slipped 0.8% as traders shifted toward the dollar and gold. Turkey’s lira and Egypt’s pound both fell over 1% against the U.S. dollar in Monday trading.
China and Russia: The X-Factors
Beijing has called for “maximum restraint” and reiterated its oil interests in Iran. Over 10% of China’s crude imports come from Iran, and any prolonged disruption could force Beijing to tap its strategic reserves.
Meanwhile, Russia condemned the U.S. strikes and could leverage the situation to strengthen its energy market position, particularly in Europe. Gazprom shares rose 2.6% in Moscow trading.
How Should Investors React?
The VIX, Wall Street’s fear gauge, edged up to 16.4 on Monday but remains well below crisis levels.
David Kelly, Chief Global Strategist at JPMorgan Asset Management, suggested: “Stay diversified, avoid panic selling, and wait for the dust to settle. Historically, market overreactions to geopolitical shocks have offered buying opportunities”.
In the short term, investors might consider:
- Energy ETFs like XLE (up 2.2% Monday, source: State Street Global Advisors)
- Defense funds like ITA (up 1.4%)
- Gold (GLD, IAU) as inflation hedges
- Volatility plays like VXX or options for downside protection
But long-term strategy remains key. Diversified portfolios, defensive positioning, and risk awareness are critical in navigating geopolitical uncertainty.
Final Word
While a war between the U.S. and Iran is far from certain, the risks are no longer theoretical. For now, markets remain in a “wait-and-see” mode — but the next 48 hours could prove pivotal.
Whether oil continues to climb, cyberattacks increase, or diplomacy prevails will determine not only regional stability but also the mood across global stock exchanges.
Stay informed. Stay diversified. And stay ready for surprises.
Marc has been involved in the Stock Market Media Industry for the last +5 years. After obtaining a college degree in engineering in France, he moved to Canada, where he created Money,eh?, a personal finance website.
