Global Markets Tumble as War Escalates; Nasdaq in Correction, Nikkei Crashes, Oil Surges to Multi-Year Highs
- Global markets are under intense pressure as the Middle East conflict escalates into its fifth week, triggering a broad risk-off move across assets. In the U.S., the Nasdaq 100 has entered correction territory, weighed down by rising Treasury yields and a deepening tech sell-off. Investor sentiment has been further shaken by AI-related margin concerns and a sharp decline in semiconductor stocks following Google’s “TurboQuant” announcement. Nasdaq futures are down around 0.8%, signaling continued weakness.
- European markets are also bracing for losses, with the DAX expected to open lower amid global contagion. Surging oil prices are fueling stagflation fears, raising concerns that central banks may delay rate cuts as inflation risks reaccelerate, putting additional pressure on equities.
- Asia is seeing the most severe reaction. Japan’s Nikkei 225 plunged nearly 5%, falling below 51,000 to a new 2026 low. The sell-off reflects the country’s vulnerability to energy shocks, as soaring crude prices and geopolitical instability weigh heavily on sentiment.
- In commodities, Brent crude has surged above $116 per barrel—its highest level since mid-2022—after Iran-backed Houthi forces joined the conflict and targeted Israel. Oil prices are up roughly 59% this month, driven by severe supply disruptions as Iran restricts traffic through the Strait of Hormuz and the U.S. increases military presence in the region. Overall, escalating conflict and tightening energy supply are amplifying volatility and downside risks across global markets.
Oil Climbs on Fears of Multi-Front Supply Shock
- Oil rises as Middle East tensions escalate
- Iran strikes a Saudi base, increasing risk to energy infrastructure
- Houthi involvement threatens key oil routes like Bab el-Mandeb
- US military buildup and Israeli strikes weaken diplomacy hopes
- Markets price in a growing supply shock
- If key routes face further disruption, oil prices could move significantly higher

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