Markets entered March with risk sentiment under pressure from two distinct catalysts: intensifying conflict dynamics around Iran that raise the probability of energy-supply disruptions, and revived tariff uncertainty tied to U.S. political threats toward Europe. Together, they are reshaping near-term pricing for oil, regional equities and traditional havens, and complicating an outlook that only recently reflected strong equity momentum in Asia and solid global performance in 2025.

Geopolitical escalation and immediate market reactions Reporting on the latest phase of hostilities indicates rapid transmission into both financial markets and the real economy. Semafor said Iranian strikes across the Gulf pushed Saudi Arabia’s Tadawul index down almost 5% before it pared some losses, while oil futures spiked after the attacks. In aviation, CNBC reported that airlines cancelled hundreds of flights following U.S. and Israeli strikes in Iran, highlighting near-term operational disruption beyond commodity markets.