Global markets tumbled Monday as escalating rhetoric between the US and Iran pushed investors toward safety, with stocks and bonds extending their losing streak into a third week.
The MSCI Asia Pacific Index dropped 3.5%, bringing its 2026 gain down to less than 1%. Japan’s Topix fell 3.4%, while South Korean equities plunged 6.3%, sending the won to its lowest level since 2009. US futures signaled further losses, with S&P 500 contracts down 0.6% ahead of the European open.
The selloff extended across asset classes. Gold tumbled 4.1% to $4,308.88 an ounce, erasing its year-to-date gains. Silver fell for a fifth consecutive session. Meanwhile, the Bloomberg Dollar Spot Index edged up 0.2% as investors sought refuge in the greenback.
Bond markets also felt the pressure. The yield on the 10-year Treasury rose three basis points to 4.41%, while two-year yields climbed four basis points to 3.94%. Japan’s 10-year yield advanced 4.5 basis points to 2.305%, and Australia’s 10-year yield jumped nine basis points to 5.12%.
The escalation followed President Donald Trump’s 48-hour ultimatum to Tehran to reopen the Strait of Hormuz, threatening to destroy Iranian power plants if the deadline passed. Iran responded by vowing to shut the waterway indefinitely and target US and Israeli energy infrastructure across the region.
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Oil markets remained volatile but showed a more muted reaction. Brent crude fluctuated between gains and losses throughout the Asian session, while West Texas Intermediate was little changed. Both benchmarks remain up more than 70% since the conflict began in late February.
The standoff has effectively halted traffic through the Strait of Hormuz, through which roughly one-fifth of the world’s oil and liquefied natural gas normally flows. The supply crisis continues to ripple into gasoline prices, fertilizer costs, and food production as the conflict enters its fourth week.
Investors are now bracing for potential interest rate hikes from central banks as the prolonged war threatens to stoke inflation and slow global growth. Federal Reserve Chair Jerome Powell has said the central bank needs to see more progress on inflation before cutting rates again.
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