NEW YORK, March 3, 2026, 10:17 EST
- Wall Street opened sharply lower as investors priced in a wider Middle East war.
- Oil and gas prices climbed further, reviving inflation fears and hitting risk assets.
- Treasury yields rose and bitcoin fell as traders cut near-term rate-cut bets.
U.S. stocks opened sharply lower on Tuesday as investors weighed a widening conflict in the Middle East and its impact on inflation and trade. The Dow fell 0.84% at the open, the S&P 500 slid 1.18% and the Nasdaq dropped 2.01%. 1
The market’s focus has snapped back to energy. Higher oil and gas prices can feed through to transport and manufacturing costs, complicating the Federal Reserve’s push to cool inflation without stalling growth.
Selling spread across regions. S&P 500 e-mini futures were down 1.4% and Nasdaq e-mini futures fell 1.8% earlier, while Europe’s STOXX 600 dropped as much as 3.6% and South Korea’s Kospi sank 7.2%. The dollar held near a six-week high, while bitcoin fell to $67,871 and gold was down 2.7% at $5,185.80 an ounce, Reuters reported. 2
Oil extended a three-session surge as traders focused on shipping and supply risks around the Strait of Hormuz, a key route for global energy flows. Brent rose about 7% to $83.44 a barrel after touching its highest since July 2024, while U.S. crude gained about 7% to $76.26, Reuters said. 3
Bond markets sold off too — an awkward mix for investors who usually lean on Treasuries when stocks wobble. “Investors are basically going back to the 2022 energy-shock template,” said Rohan Khanna, head of euro rates strategy at Barclays, as traders pared back rate-cut expectations. 4
Monday’s session offered a preview of the tug-of-war. U.S. stocks clawed back early losses, with tech and defense shares helping offset weakness in travel-linked names; Delta and United fell more than 2% each, while Carnival dropped 7.6% and Norwegian Cruise fell over 10%, Reuters reported. Alex Morris, CEO of F/m Investments, said oil would need to reach $100 a barrel to become an “emotional trigger” for the broader market. 5
Some strategists argue investors still see geopolitics as noisy unless energy supply breaks. “We know that usually when there’s conflict around the world, it doesn’t go on to materially impact the direction of US corporate profits,” David Stubbs, chief investment strategist at AlphaCore Wealth Advisory, told CNN, while others pointed to history showing market hits often fade after early volatility. 6
Gold, a classic safe haven, slid hard as the dollar strengthened and traders chased cash. “The move lower in gold appears to be driven by a flight to liquidity,” said Bob Haberkorn, senior market strategist at RJO Futures, adding that geopolitics could still support prices later. 7
Traders are trying to pin down duration. Iranian media reported on Monday that a senior Revolutionary Guards official said the Strait of Hormuz was closed, and analysts warned that attacks on additional energy infrastructure would pose a bigger risk than shipping disruptions alone.
But the path is messy. If hostilities ease and shipping normalizes, oil could cool quickly and the market’s inflation scare could fade; if the conflict spreads and outages persist, investors risk a longer period of higher prices, higher yields and thinner appetite for risk.
