What's next for global markets as oil surges and stocks plunge on Middle East conflict

March 3, 2026

TL;DR

Global stock markets and bond yields plummeted on Tuesday as the Middle East conflict intensified, increasing risk-off sentiment.
The U.S.-Iran conflict, now in its fourth day, prompted warnings from President Trump about its potential duration.
European stocks fell over 3.2%, with banking, insurance, and retail sectors down more than 4%. Asian markets also closed lower.
Bond yields rose across major economies, including Japan, Switzerland, Australia, the UK, Germany, and the U.S.
Forex markets were volatile, with the U.S. dollar strengthening against the pound, euro, Swiss franc, and yen.
Cryptocurrencies, including bitcoin, also experienced downward pressure.
Oil prices surged, with Brent crude jumping almost 9% and WTI up more than 8%.
Some strategists believe the market sell-off could be short-lived, as the current oil price increase does not yet compare to historical major crises.
For the sell-off to be sustained, analysts point to a required 50% oil price spike over months, a recessionary economic shock, or a hawkish pivot from central banks, none of which have yet occurred.
The general assumption remains that the conflict will be short-lived, and investors are advised to maintain positions rather than move to cash.
Strategists anticipate a brief disruption to global energy supply, with oil prices expected to partially reverse as transit disruptions become clearer and military action fades.

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