Stock markets fell sharply early Monday as traders remained nervous about the escalating Iran–Gulf situation and rising energy prices. Several major Asian markets plunged by 3% or more, European indices fell about 2% in morning trading, government bond yields rose, and traditional safe havens gold and silver plunged more than 6% and 7% respectively. Markets then reversed course after US President Donald Trump signaled a softer tone, prompting a rally in Europe and a positive start in the US.
(At its lowest ebb, Japan’s Nikkei was down nearly 5% in a single day, but it recovered slightly before the close of trade. Image: Eugene Hoshiko/AP Photo/picture alliance)
Where key stocks and prices stood early Monday
Asia’s markets had closed before Trump touted supposed bilateral talks with Iran that Tehran had not confirmed. Morning moves included:
– Germany’s DAX down just over 2% by midday local time
– France’s CAC 40 roughly 2% lower
– London’s FTSE 100 similar losses until a late-morning uptick
– Japan’s Nikkei 225 closed down 3.5% at 51,515.49 after steeper intraday losses
– South Korea’s Kospi plunged about 6.5% to 5,405.75
– Hong Kong’s Hang Seng down 3.5%; Shanghai Composite down 3.6%
– Taiwan’s Taiex down 2.5%; Australia’s S&P/ASX 200 down 0.7%
– Gold and silver both plunged nearly 7–8%
– Crude oil rose marginally in the morning
– Western governments’ 10-year bond yields showed modest gains
When and where the afternoon rally took effect
Around midday in Europe, as Trump softened his weekend rhetoric, main indices flipped into positive territory and logged cautious gains:
– The DAX rebounded past 23,000 points, nearing 3% gains intraday and closing up 1.22%
– France’s CAC 40 briefly rose over 2% and closed up 0.8%
– The FTSE 100 ended down only 0.25%
– In New York, the Dow Jones was up about 2.22% by late morning and the S&P 500 up about 1.78%, with gains moderating later
– Gold recovered some losses and silver briefly turned positive
– Crude oil tumbled roughly 9%, slipping below $90 per barrel
– Various cryptocurrencies moved from losses back toward gains amid high volatility and heavy trading volumes
Torrid March for traders despite Monday’s rally
Major Western markets have fallen substantially during the month since the US and Israeli strikes on Iran that killed Supreme Leader Ayatollah Ali Khamenei and other senior officials starting February 28:
– Germany’s DAX slipped below 22,000 early Monday after trading above 25,000 before the first Tehran attacks—a peak drop of more than 12%, recovering to a 9.3% monthly decline by close
– France’s CAC 40 has lost about 9% in a month
– The UK’s FTSE 100 is down about 7.4% in a month, aided somewhat by UK oil resources
– US markets are down broadly in line: the Dow off roughly 5% and the S&P 500 around 3.4% over the month
Strait of Hormuz remains blocked; few signs of de-escalation
Monday’s market moves followed Trump’s weekend threat to “obliterate” Iran’s power plants unless Tehran fully reopened the Strait of Hormuz within 48 hours, a warning Tehran said would prompt responses targeting US and Israeli energy and infrastructure assets. The Strait remains blocked and regional tensions show little sign of easing.
Fatih Birol, executive director of the International Energy Agency, warned that the economic instability from the war with Iran could be more severe than the 1970s oil shocks and the fallout from Russia’s 2022 invasion of Ukraine combined. “This crisis as things stand is now two oil crises and one gas crash put all together,” he said, calling it a “major, major threat” to the global economy.
Rising energy costs are complicating investors’ expectations for interest-rate cuts later this year, since higher fuel prices add inflationary pressure and make central banks less likely to reduce borrowing costs.
Edited by: Elizabeth Schumacher