Global markets fell sharply early Monday as worries over escalating Iran–Gulf tensions and rising energy costs drove a risk-off move across Asia and into Europe. Several major Asian benchmarks tumbled more than 3% in early trade, government bond yields edged higher, and traditional safe havens metal prices plunged before markets reversed course later in the day after US President Donald Trump signaled a softer tone.
Asia’s trading session closed before Trump said bilateral talks with Iran were underway — a claim Tehran had not confirmed. Morning moves included: Germany’s DAX off just over 2% by midday; France’s CAC 40 down about 2%; London’s FTSE 100 posting similar losses until a late uptick; Japan’s Nikkei 225 finishing the day about 3.5% lower at 51,515.49 after steeper intraday drops; South Korea’s Kospi plunging roughly 6.5% to 5,405.75; Hong Kong’s Hang Seng down about 3.5% and Shanghai Composite down 3.6%; Taiwan’s Taiex off 2.5% and Australia’s S&P/ASX 200 down about 0.7%. Gold and silver both slid nearly 7–8% in early trading, crude oil was slightly higher, and 10-year government bond yields in the West showed modest gains.
Around midday in Europe, markets began to rebound after Mr. Trump adopted a softer stance over the weekend. Major indexes flipped positive and logged cautious gains: the DAX climbed back above 23,000 points and closed up 1.22% after intraday gains of nearly 3%; France’s CAC briefly rose more than 2% and finished the day up 0.8%; the FTSE 100 ended down only 0.25%. In New York, the Dow Jones Industrial Average was about 2.22% higher by late morning and the S&P 500 roughly 1.78% higher, with gains moderating later. Precious metals recovered some losses and silver briefly turned positive. Oil then fell sharply, dropping roughly 9% and slipping below $90 a barrel, while the most-traded cryptocurrencies moved from losses back toward gains amid heavy volatility.
The market moves on Monday capped a turbulent month. Since late-February strikes and attacks involving the US, Israel and Iran, major Western markets have slid: the DAX traded above 25,000 before the first Tehran strikes and plunged below 22,000 early Monday — a peak decline of more than 12% from that high, leaving a roughly 9.3% drop for the month by the close. France’s CAC 40 is down about 9% over the month, the UK’s FTSE 100 roughly 7.4%, the Dow about 5% and the S&P 500 near a 3.4% monthly decline.
The Strait of Hormuz remained blocked amid the standoff. Over the weekend Mr. Trump warned he could ‘obliterate’ Iran’s power plants unless the strait was reopened within 48 hours, a threat Tehran said would bring retaliatory strikes against US and Israeli energy and infrastructure targets. With no clear signs of de-escalation, energy markets and geopolitical risk premiums remain elevated.
Fatih Birol, executive director of the International Energy Agency, warned the economic fallout from the conflict could be larger than past shocks, saying the current crisis could amount to ‘two oil crises and one gas crash put all together’ and called it a ‘major, major threat’ to the global economy. Higher fuel prices are complicating expectations for interest-rate cuts later this year, adding inflationary pressure and reducing the likelihood of quick easing by central banks.