The Iranian-Israeli war directly impacted global financial markets, as currencies and stocks experienced sharp fluctuations due to increasing geopolitical fears. In the early days of the escalation, investors rushed towards safe assets like gold and the US dollar, leading to a decline in digital currencies like Bitcoin, and stock markets in Asia, Europe, and America.
Indices such as 'Nasdaq' and 'S&P 500' recorded declines, especially in the stocks of technology and aviation companies, while shares of arms and energy companies rose, driven by expectations of increased demand in these sectors. As for currencies, emerging market currencies fell due to a flight from risk, while safe-haven currencies like the Japanese yen and Swiss franc rose.
Oil was also affected, as its prices surged significantly due to fears of supply disruptions in the event that the conflict expands to include the Strait of Hormuz, a vital artery for global energy trade.
Overall, the war has led to an increase in uncertainty, making the markets highly sensitive to any new field or diplomatic developments, with ongoing prospects for additional disruptions in the event of continued escalation.
