Global financial markets plunged into chaos following the escalation of armed conflict with Iran. Stock indices in Milan, Madrid, and Frankfurt recorded sharp declines exceeding 4 percent, while Wall Street opened under heavy selling pressure. Investors are massively offloading risky assets, fleeing towards the US dollar, while energy commodity prices, including oil and gas, are soaring sharply amid fears over the stability of Middle Eastern supplies.

Sharp Declines in Europe

Major indices in Milan (FTSE MIB) and Madrid (IBEX 35) lost over 4.5 percent, marking the worst performance in nearly a year.

Energy Price Explosion

Oil and gas prices rose by several dozen percent amid fears of transport blockades through the Strait of Hormuz.

Surprising Gold Decline

Despite its safe-haven status, gold lost 4 percent and silver 12 percent, likely due to selling to raise liquidity.

The attack on Iran and the implementation of Ayatollah Khamenei's plans triggered a secondary shock on global capital markets, leading to the deepest declines since April 2025. European trading floors, particularly in Milan and Madrid, lost between 4 and 4.5 percent of their value in a single session. The German DAX index plunged by over 1000 points, breaking through key support levels and reaching its lowest levels since December of last year. Panic also did not spare cryptocurrencies; Bitcoin lost its upward momentum as capital began to rapidly flow into safe havens such as the US dollar, which strengthened against the Swiss franc and the euro. The Middle East accounts for approximately one-third of the world's oil production. Historically, any conflict directly involving Iran has led to drastic changes in the global energy trade architecture and prolonged periods of high inflation. The situation in the commodity market is critical, as gas and oil prices reacted with an immediate increase, heightening fears of a return of high inflation in the eurozone. Simultaneously, there has been an unusual retreat from precious metals — gold lost over 4 percent, and silver as much as 12 percent of its value. Analysts suggest this may be due to a sudden demand for cash (liquidity) by financial institutions forced to cover losses on other markets. The bull market in equities has been replaced by a deep sell-off encompassing almost all sectors, except for the defense industry and energy companies. According to the International Monetary Fund, the war with Iran could permanently lower the momentum of global GDP. Investors are anxiously watching Wall Street, where futures contracts herald a continuation of the downward trend. Among the losing companies, transport giants such as Maersk or Lufthansa dominate, which is a direct result of rising fuel costs and the risk of maritime route blockades. On the Warsaw Stock Exchange, indices are also in the red, although the scale of declines is slightly smaller than in Western Europe, suggesting that emerging markets are currently viewed through the prism of global risk aversion. „The war with Iran poses a direct threat to the fragile foundations of global economic recovery.” — IMF Representative

Mentioned People

  • Ali Chamenei — The Supreme Leader of Iran, whose war plan is being implemented by the army.