On Monday, global indices responded moderately to news of the United States joining the Middle East conflict. The MSCI World Index, which tracks over a thousand companies from 23 developed countries, declined by only 0.12% as of 1:00 p.m. Singapore time. Meanwhile, currencies and gold showed mixed performance — the Japanese yen weakened by 0.64% against the dollar, while spot gold prices dropped by 0.23% to $3,360 per ounce. At the same time, the dollar index rose by 0.35%.

Despite the clear escalation in the region, markets have shown no signs of panic so far, especially compared to the sharp reaction following Israel’s airstrikes on targets in Iran. This suggests that market participants view the latest developments more as a stabilizing factor than a sign of further conflict.

What experts are saying

Some analysts see the US strikes not as the start of a major escalation but rather as an attempt to reduce the threat of nuclear proliferation.

«Markets interpret the attack as a removal of the nuclear expansion threat, not as a signal of global war», said Dan Ives from Wedbush, noting that the likelihood of the conflict spreading to other countries in the region is considered low.

Other experts broadly agree that the current events do not pose a systemic risk to the global financial markets. Still, the situation remains tense — traders are closely watching Iran’s response and any further actions from Washington.

The Strait of Hormuz and possible scenarios

Iran’s parliament has officially confirmed its readiness to close the Strait of Hormuz in the event of serious threats to national security. This strategic waterway transports approximately 20 million barrels of oil per day — its closure could trigger a sharp price surge and global instability.

If Iran does close the strait, markets are anticipating the following outcomes:

• Oil prices may exceed $100 per barrel, increasing inflationary pressure
• Investors will shift en masse to safe-haven assets like gold and government bonds
• Stock markets could drop by 10% or more due to panic selling
• New sanctions and US countermeasures may follow, heightening geopolitical tensions

However, most analysts see this scenario as extremely negative but unlikely, given the potential for a swift military response from the United States. Some believe the US strikes have reinforced confidence in America’s «peace through strength» approach, which they say could help push the S&P 500 to 6,500 by the end of 2025.

At this point, financial markets view the renewed conflict as a localized and largely manageable threat. Key indicators remain stable, and investors are maintaining their positions rather than making abrupt moves. The coming days will be crucial: Tehran’s reaction and Washington’s decisions will determine the future trajectory of stock prices, commodity markets, and the overall investment climate.