5 charts that reveal the financial market chaos caused by the Iran war

Story by Patrick O’Donnell 

Markets hate uncertainty and since the U.S. and Israel launched the first wave of attacks on Feb. 28, that’s what the war in Iran has given them. From energy to supposed havens, Barron’s lays bare the economic fallout from the conflict through the following five charts:

Global Indexes

Conflict in the Middle East sparked a global selloff on stock markets and ramped up volatility. While U.S. shares may have taken the spotlight, the country’s markets fared much better than others with South Korea’s Kospi the standout faller. Before the attacks, the red-hot Asian index had been a world-leader—rising 48% for the year.

Energy

The war in Iran sent oil prices higher as traders rushed to price in supply risks. The Strait of Hormuz—which transports roughly 20% of the world’s oil supply—has been effectively closed since the beginning of March. And while crude oil has grabbed the headlines, European natural-gas prices have soared, too.

Equities

Sectors have diverged sharply as investors sort through the winners and losers in the conflict. An exchange-traded fund tracking crude-oil tankers was the standout early beneficiary, joined by defense-focused vehicles. But airlines have borne the brunt of the selloff amid fears over rising fuel prices.

Havens

The dollar has risen against a weighted basket of its peers since the first strikes on Iran, fulfilling its traditional haven role. But gold futures have tumbled, suggesting investors aren’t seeing the precious metal as a way to shield their portfolios from risk. One reason is that bullion tends to struggle when interest rates are higher, and the market is worried central banks will have to keep borrowing costs higher to prevent surging oil prices from triggering a flare-up in inflation.

Polymarket

No-one can predict the future with much certainty when it comes to a conflict—but you can try. Polymarket allows users to bet on future events with the counterparty to each trade being another user. A single value represents the market’s view of an event’s odds. As of Tuesday March 10 the odds that crude oil will hit $200 by the end of March was just 3%.