By John Towfighi, CNN
New York (CNN) — Oil prices surged, global stocks sank and gold rose Monday as concerns about a broadening war with Iran began to ripple through financial markets.
Investors are bracing for volatility in global energy markets as developments unfold in the Middle East. While markets saw sharp moves, the volatility so far has been largely as expected, and Wall Street is on watch for potential further disruptions to oil and gas prices.
The escalation in tensions between the United States and Iran sparked a bid for haven assets, with investors scooping up gold and the US dollar as places to park their cash during the turmoil. Here’s a wrap up of how markets are reacting to the developing turmoil:
Global oil prices on Monday traded at their highest level in just over one year. Brent crude, the international benchmark, surged almost 9%, to $79.33 per barrel. That marks its highest level since last January — surpassing the levels reached during US strikes on Iranian nuclear facilities in June.
Meanwhile, West Texas Intermediate crude, the US benchmark, gained almost 8%, reaching $72.39 per barrel, its highest level since June. Oil prices surged as much as 13% Sunday evening before paring gains as investors hold hope for limited long-term disruptions to markets.
Stocks were lower across the globe. Europe’s benchmark Stoxx 600 fell 1.88%. Japan’s Nikkei 225 dropped 1.35%. US stocks were set to open lower: Futures tied to the Dow sank 550 points, or 1.1%. S&P 500 futures fell 1.2% and Nasdaq futures sank 1.55%.
Wall Street is widely betting on a tumultuous yet relatively short conflict. Stocks historically tend to shrug off geopolitical concerns or rebound shortly after tensions settle. Just how high oil prices rise will be critical for determining the impact on stocks.
And while investors are grappling with resurgent geopolitical turmoil, Wall Street is also dealing with lingering weakness in tech and AI stocks as well as some concerns about the health of private credit, elevated stock valuations and potential complacency in markets.
Wall Street’s fear gauge, the VIX, jumped 18% and traded at its highest level three months.
Diesel prices surged on Monday, outpacing the gains in oil prices and hitting their highest level in two years. Europe gasoil futures surged 19% and US diesel futures surged 14%.
Natural gas futures surged by a whopping 49% in Europe as the region braces for fallout from volatility in energy markets as conflicts rages in the Middle East. QatarEnergy, Qatar’s state-run energy company, on Monday halted production of liquefied natural gas after an Iranian attack on its facility in Ras Laffan. US natural gas futures rose 5%.
Gold prices surged 3% and traded at their highest level in one month. Gold reclaimed $5,400 a troy ounce and was set for its biggest single-day gain since early February. Gold, traditional considered a haven, had been acting like a meme stock in recent weeks with volatile swings. But the metal benefited from haven demand Monday as the US-Iran conflict stirred up fresh uncertainty in markets.
The US dollar strengthened against other major currencies, benefitting from investors seeking out safe havens. The US dollar index gained 0.9%, erasing its losses for this year and trading at its highest level in five weeks. Uncertainty about oil prices and US-Iran tensions could, if prolonged, lead to the Federal Reserve holding interest rates steady for longer, which can also boost the dollar.
US government bonds fell Monday after initially gaining Sunday. US Treasury yields, which trade in opposite direction to bond prices, fell Sunday before ticking higher Monday. The 10-year Treasury yield, which influences borrowing costs across the economy, fell as low as 3.96% Sunday — its lowest level since November — before trading at 4.01% on Monday.
Bitcoin traded just below $66,000 but was little changed. The cryptocurrency has edged lower by less than 1% across the past day, failing to benefit from the safe haven demand that boosted gold and the dollar. Bitcoin has languished this year and is down almost 50% since its record high in early October.
While broader markets were lower, industries like defense and airlines saw outsized moves. Shares of defense stocks Northrop Grumman (NOC), RTX Corporation (RTX) and Lockheed Martin (LMT), rose 4.9%, 6.5% and 5%, respectively, in premarket trading.
Shares of airline stocks fell as investors and businesses grapple with the uncertainty plaguing the Middle East and major cities’ proximity to the conflict, such as Dubai. Shares of major US airlines American Airlines (AAL), Delta Air Lines (DAL) and United Airlines (UAL) sank more than 5.5% in premarket trading. Meanwhile, shares of Air France sank 9% and Lufthansa shares fell 5%.
“Our take is markets overall are holding up OK, all things considered,” Krishna Guha, vice chairman at Evercore ISI, said in a Monday note.
Guha said a scenario where oil trades around $80 per barrel but the conflict is relatively short-lived would result in limited impacts on the global economy. But a scenario where oil rises above $100 would be “qualitatively different,” with much bigger shocks to the global economy.
The-CNN-Wire™ & © 2026 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
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