Iran-Israel War Sparks Market Chaos
Iran fired successive waves of missiles at Israel and U.S. positions while Israel launched fresh airstrikes on Iranian assets in Beirut, intensifying the Middle East conflict. Oil prices spiked near $120/barrel before settling around $99 for Brent crude, while Bitcoin surged 2.6% to ~$68,000 as investors sought safe havens. NATO intercepted an Iranian ballistic missile headed for Turkey for the second time, raising risks of wider regional conflict.
This direct conflict is an escalation of a decades-long "shadow war" that began after Iran's 1979 Islamic Revolution. For years, Tehran has backed anti-Israel groups like Hezbollah and Hamas, while Israel has conducted airstrikes on Iranian-linked targets in Syria and has been blamed for assassinations of Iranian nuclear scientists. The shift from proxy to direct military engagement has been building, marked by a series of tit-for-tat strikes in 2024 and a brief but intense 12-day war in June 2025. That conflict began after Israel bombed Iranian military and nuclear facilities, leading to a massive retaliation by Iran involving over 550 ballistic missiles and more than 1,000 drones. The economic fallout extends far beyond oil. Asian and European stock markets have been hit particularly hard, with South Korea's Kospi index losing 11% and Japan's Topix falling 6% in the first week of the conflict. The effective closure of the Strait of Hormuz, a critical artery for global trade, has paralyzed shipping and sent air freight costs from Asia to Europe soaring by 45%. While some investors have moved into Bitcoin, the primary safe-haven asset in this crisis has been the U.S. dollar, with the Dollar Index approaching the 100 mark. The Japanese Yen and Swiss Franc have also strengthened significantly as investors seek shelter from market volatility. Traditional safe havens like gold, however, have seen a less consistent rally. The United States maintains a significant military footprint in the region
