NEW YORK, March 3, 2026, 10:17 EST
- Stocks tumbled at the open, with traders bracing for the fallout from a potential broader conflict in the Middle East.
- Oil and gas prices pushed higher, adding fresh fuel to inflation worries and putting pressure on risk assets.
- Treasury yields climbed, while bitcoin slipped, with traders dialing back expectations for rate cuts in the near term.
Wall Street kicked off Tuesday deep in the red, with the Dow dropping 0.84% out of the gate. The S&P 500 slipped 1.18%, while the Nasdaq skidded 2.01%. Investors are eyeing a deepening Middle East conflict, weighing its fallout for inflation and trade. 1
Energy’s back in the spotlight. Rising oil and gas prices have a way of driving up transport and manufacturing costs—another headache for the Federal Reserve as it tries to slow inflation without derailing growth.
Selling pressure hit markets across the board. S&P 500 e-mini futures slid 1.4%, with Nasdaq e-minis showing a steeper 1.8% loss earlier. Over in Europe, the STOXX 600 tumbled up to 3.6%, and South Korea’s Kospi plunged 7.2%. The dollar hovered close to a six-week peak. Bitcoin dropped to $67,871, and gold slid 2.7% to $5,185.80 an ounce, according to Reuters. 2
Oil prices pushed higher for a third straight session, as market attention zeroed in on shipping and supply threats near the Strait of Hormuz, a vital artery for global energy. Brent climbed roughly 7% to $83.44 per barrel, hitting levels not seen since July 2024. U.S. crude matched the advance, jumping about 7% to $76.26, according to Reuters. 3
Bonds took a hit as well, upending the usual playbook for investors who tend to seek safety in Treasuries when equities slip. “Investors are basically going back to the 2022 energy-shock template,” said Rohan Khanna, who leads euro rates strategy at Barclays, after traders trimmed their outlook for rate cuts. 4
Monday had U.S. stocks reversing earlier declines, lifted by gains in tech and defense even as travel stocks took a hit. Delta and United both slid more than 2%, Carnival sank 7.6%, and Norwegian Cruise tumbled more than 10%, according to Reuters. “Oil needs to hit $100 a barrel before investors really react,” said Alex Morris, CEO of F/m Investments. 5
Some strategists say investors tune out geopolitical noise unless it disrupts energy flows. “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. Others note that market shocks tied to conflict have a history of fading, volatility ebbing after the initial jolt. 6
Gold took a sharp hit, slipping as the stronger dollar sent traders scrambling for liquidity. “The move lower in gold appears to be driven by a flight to liquidity,” said Bob Haberkorn, senior market strategist at RJO Futures. Still, Haberkorn noted that geopolitical factors could keep a floor under the metal going forward. 7
Traders are wrestling with the big question—how long does this go on? Iranian media on Monday quoted a top Revolutionary Guards official claiming the Strait of Hormuz was closed. Some analysts flagged that fresh attacks targeting energy infrastructure could be an even greater threat than just shipping snarls.
The road ahead isn’t straightforward. Should hostilities die down and shipping routes reopen, oil prices might retreat fast, potentially taking the edge off the recent inflation jitters. On the flip side, if the conflict escalates and supply disruptions drag on, investors could be staring at a stretch of steeper prices, higher yields, and shrinking risk appetite.
