Global markets were rattled on Friday following reports that Israel launched strikes on Iran’s nuclear program sites, marking a serious escalation in Middle East tensions and sparking a broad risk-off move across asset classes.
Equity markets tumbled as investors fled to safer assets.
- S&P 500 index futures fell by as much as 2%
- Asian stock gauges slid by 1%
- Treasuries rose, pushing the 10-year U.S. yield down to 4.34%
- The Japanese yen and gold also climbed on haven demand
Meanwhile, crude oil prices surged by 11%, the biggest one-day gain in over three years, on fears that the geopolitical shock could disrupt energy supplies across the region.
Cryptocurrencies plunged, while the U.S. dollar index initially dipped but later rebounded by 0.3%, as investor appetite for safe currencies outweighed concerns about the greenback’s recent weakness.
“We are seeing classical risk-off moves,” said Matthew Haupt, portfolio manager at Wilson Asset Management. “What we are watching now for is the speed and scale of the response from Tehran. That will shape the duration of the current moves. Quite often these moves fade after the initial shocks.”
Markets will now closely monitor Iran’s potential response, which could determine whether this marks the start of a prolonged risk-off phase or a short-term shock.
