By Alex Kozul-Wright
Friday marks almost one month since the U.S. and Israel launched joint military strikes on Iran, triggering a wider conflict across the Middle East and sending ripples through financial markets.
As the war grinds into its second month, investors are moving beyond the initial shock to assess how tensions, centered on a key transit route near the Persian Gulf, are feeding through to broader asset prices.
The most obvious place to start is oil. The effective closure of the Strait of Hormuz -- a vital maritime choke point -- has boosted energy prices. Brent crude futures have surged 41% since Feb. 27, on the eve of the conflict, while West Texas Intermediate futures have climbed 43%.
Stock markets have been clobbered. Higher energy prices have the potential to cause stagflation -- a lethal combination of higher inflation and lower growth that would likely undermine businesses' bottom lines.
As of Thursday's close, the S&P 500 was down 5.8% this month, while the Dow Jones Industrial Average has fallen 6.2%, according to Dow Jones Market Data.
A surprising victim of the war has been precious metals. Continuous gold futures have dropped 16% since the end of February to $4,423.7 per ounce. Silver futures, meanwhile, have dipped 27%.
Shifting interest rate expectations are the likely driver -- higher energy prices have reduced the chances of a near-term Fed cut, weighing on the price of nonyielding assets like precious metals.
Meanwhile, President Donald Trump announced an extended 10-day pause in strikes on key Iranian infrastructure Thursday. The deadline was originally set for Friday.
"More concrete signs of talks would surely be taken positively by investors, but they also have to grapple with the potential for further escalation," wrote Jim Reid, a strategist at Deutsche Bank, in a Friday note.
Write to Alex Kozul-Wright at alexander.kozul-wright@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 27, 2026 10:21 ET (14:21 GMT)
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