South Korea Market Crashes Historic 8%
South Korea's stock market crashed 8% and was halted — its worst day in history — while Thailand and Dubai also hit limit down amid global turmoil. Over $3.2 trillion was wiped out globally in 48 hours, including $1.7T from the US alone. Notably, US markets remained green amid the chaos, showing unusual resilience.
The market turmoil was triggered by joint U.S.-Israeli military strikes on Iran that began on February 28, 2026, which included the assassination of Iran's Supreme Leader, Ali Khamenei. In retaliation, Iran's Islamic Revolutionary Guard Corps effectively closed the Strait of Hormuz, a critical chokepoint for global trade. This immediate disruption of the Strait of Hormuz, through which about 20% of the world's daily oil supply passes, caused Brent crude oil prices to surge by as much as 13% to over $82 a barrel. The crisis disproportionately affects Asian economies, as around 84% of crude oil and 83% of liquefied natural gas (LNG) transiting the strait are destined for Asia. South Korea, for instance, sources roughly 60% of its crude oil via this route. The historic crash of South Korea's KOSPI index saw it close down 12.06%, surpassing the drop seen after the 9/11 attacks. The country's volatility index, known as the "fear index," skyrocketed to its highest level since the 2008 global financial crisis. The sell-off was so intense that out of more than 800 stocks on the benchmark, only 10 finished in the green. Thailand's stock market was also hit hard, with the benchmark SET Index plunging 8.01%, which triggered a 30-minute trading suspension. In the Middle East, after a two-day suspension, Dubai's Financial Market General Index fell 4.7% upon reopening, its steepest single-day drop since mid-2022. The exchange implemented a temporary 5% lower price limit to manage the sell-off. Contrary to initial appearances of resilience, U.S. markets also experienced significant volatility. The Dow Jones Industrial Average, for instance, plunged more than 1,200 points in morning trading before paring its losses to close down 403 points. While there was some recovery from the initial sharp sell-offs, the S&P 500 and Nasdaq Composite also closed down, with losses of 0.94% and 1.02% respectively on the day of the major global turmoil. The shockwaves from the Middle East conflict led to widespread investor panic and a flight to "safe haven" assets like gold. The VIX, Wall Street's own "fear gauge," also saw a significant spike. The broader global economic concern is that a sustained period of high oil prices could fuel inflation, forcing central banks to delay interest rate cuts and potentially tipping the world into a recession.
