Quick overview

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Global markets deepened their losses Tuesday as fears intensified over a broader Middle East war and Iran’s announcement of a closure of the Strait of Hormuz, the critical passageway through which roughly one-fifth of the world’s traded oil flows.

Major stock exchanges extended their selloff, while crude prices surged again, with Brent climbing above $83 per barrel.

U.S. markets were sharply lower. The S&P 500 fell 2.25%, the tech-heavy Nasdaq Composite dropped 2.5%, and the Dow Jones Industrial Average declined 2.29%.

In Europe, the Euro Stoxx 50 tumbled 4.03%. Losses were widespread: Germany’s DAX slid 4.11%, France’s CAC 40 fell 3.45%, and the UK’s FTSE 100 dropped 3.22%.

In Asia, Hong Kong’s Hang Seng Index lost 1.12%, while the Shanghai Composite declined 1.43%. South Korea’s KOSPI 50 plunged 8.55%, and Japan’s Nikkei 225 fell 3.08%.

Oil prices surge further

Brent Crude rose another 7.29% on Tuesday, marking its third consecutive daily gain, as escalating hostilities between the United States, Israel, and Iran — along with threats to maritime traffic through the Strait of Hormuz — heightened fears of supply disruptions from the Middle East. European Brent futures reached $83.49 per barrel after already jumping nearly 7% on Monday.

Meanwhile, West Texas Intermediate (WTI) climbed 7.79% to $76.78 per barrel. In the previous session, the contract had briefly hit its highest level since June 2025 before easing to close 6.3% higher.

With no rapid de-escalation in sight, the effective closure of the Strait of Hormuz and Iran signaling its willingness to target regional energy infrastructure suggest that upside risks remain elevated — and could intensify the longer the conflict persists.

Strait of Hormuz closure deepens crisis

The U.S.- and Israel-led air campaign against Iran expanded Monday, with Israel striking Lebanon and Iran retaliating by targeting energy infrastructure across Gulf states and oil tankers in the Strait of Hormuz.

Oil tankers and container ships have begun avoiding the route after insurers reportedly withdrew coverage for vessels operating in the area, while global shipping rates for oil and gas have surged.

Concerns escalated further after Iranian media reported that a senior commander of the Islamic Revolutionary Guard Corps declared the Strait of Hormuz closed and warned that Iran would fire on any vessel attempting to pass through the waterway.