Global markets shifted toward safe-haven assets Monday after US strikes on Iran escalated Middle East tensions. The dollar strengthened against the euro and other major currencies, while Brent crude oil surged as much as 5.7% to $81.40 per barrel before paring gains. US equity futures declined as investors weighed the risks of Iranian retaliation, including potential disruption to the Strait of Hormuz—a critical passage for global energy supplies.
Market experts suggest the reaction has been relatively contained because investors anticipate the conflict will remain localized. However, analysts warn that more aggressive moves could occur if Iran blocks oil shipments or attacks US forces in the region. Morgan Stanley analysts project oil could fall to the $60s per barrel with a quick resolution but may stay elevated or spike higher if tensions persist. Fund managers have already reduced stock holdings and increased hedging, potentially limiting further downside in equity markets.