Market Reactions to Iran Operations - Summary

By Elior Manier - 2 March 2026

Overview of the Situation

This weekend marked the initiation of military operations in Iran, led by US and Israeli forces with the objective of overthrowing the Islamic regime. The operation commenced with the targeted killing of Ayatollah Ali Khamenei, and is expected to last approximately four weeks, as stated by President Trump and the Head of the Department of War, Pete Hegseth. Continuous strikes are being conducted on facilities belonging to the Islamic Revolutionary Guard Corps (IRGC) and missile launchers.

Retaliation and Regional Impact

In response, the Iranian regime has launched retaliatory attacks on US positions throughout the Middle East and has targeted several Arab nations, including the UAE, Bahrain, Jordan, Kuwait, and Oman. Hezbollah has also engaged in the conflict, deploying drones and ballistic missiles towards Israel and Cyprus, where UK military bases are located. Reports indicate that the leader of Hezbollah has been killed during the conflict.

Market Implications

The ongoing conflict is expected to significantly affect market sentiment, particularly concerning the Strait of Hormuz, a critical chokepoint for oil transportation. Historically, disruptions in this area have led to global oil supply crises, making the situation particularly sensitive for energy markets.

Market Reactions

Despite the escalating conflict, market reactions have been relatively contained. Key developments include:

Energy Markets

WTI oil prices initially surged to $73.50 before settling around $71.50, reflecting a 6.5% increase from Friday's close. Brent crude saw a more significant spike, approaching $80.00 before retracing slightly.

Metals Markets

Gold prices have risen, while other metals like Platinum and Silver have seen slight declines. Gold is currently trading higher, indicating a shift towards safe-haven assets amidst the turmoil.

US Dollar

The US Dollar has strengthened as investors flock to safe-haven assets, with the Dollar Index consolidating near 98.00. Analysts suggest that if it retraces to this level, dip-buying could occur.

Risk Assets

Global stock markets have experienced corrections due to risk-off sentiment, although US benchmarks have seen some dip-buying activity. Cryptocurrencies initially fell but have since rebounded, with Bitcoin maintaining its position above the 200-Day Moving Average at approximately $69,000.

Conclusion

As the situation in Iran develops, market participants are advised to closely monitor communications and announcements that could influence market dynamics. The potential for prolonged conflict raises concerns about volatility and risk sentiment in the financial markets.

For further insights, listeners are encouraged to check out the latest podcast episode discussing these developments.