On Thursday night, Israel started a series of airstrikes targeting Iranian nuclear sites. The abrupt escalation sent shockwaves across the global economy, unsettling investor confidence and markets all around the world.
The military strikes on sensitive nuclear installations have dramatically increased geopolitical tensions in the Middle East. As a result, investors flocked to safe havens, sending US stocks down while commodities such as gold and oil rose.
Major US indices began lower on Friday, as the aftermath of the overnight bombings reverberated throughout financial markets. The Dow Jones Industrial Average fell 1.12% to 42,488.01, the Nasdaq Composite down 0.72% to 19,520.20, and the S&P 500 opened at 6,005.10.
Gold prices rose 1.61% in early morning trading to $3,440 per ounce, showing increased investor concern. Oil, which is especially sensitive to Middle Eastern upheaval, increased by 5.9%, surpassing $74 per barrel.
Gold and oil have performed consistently over the last year throughout periods of armed conflict and political uncertainty. As war fears reemerge, traders seem to be returning to these old safe-haven investments.
Bitcoin (BTC) fell 1.9% in the last 24 hours, causing a huge hit to the cryptocurrency market. The broader digital asset market fell by 3.21% as investors withdrew from riskier assets amid mounting uncertainty.
Nic Puckrin, a crypto analyst and the founder of The Coin Bureau, provided insights into the looming issue. He warned that digital assets may face additional pressure if the situation worsens, particularly if Iran seeks to seal the Strait of Hormuz, a major chokepoint for global oil transit.
“If the Strait is shut down, oil prices will explode, and high-risk assets like crypto could see even more dramatic drops,” Puckrin explained. “And since crypto trades nonstop, any weekend escalation could catch the market off guard.”
U.S. President Donald Trump weighed in, claiming he had earlier warned Iran to make a deal. “Two months ago I gave Iran a 60-day ultimatum to make a deal. Today is day 61,” Trump said. “They just couldn’t get it done.”
Despite these remarks, political reassurances have done little to calm investor anxiety, as market participants prepare for potential retaliation and extended conflict.
Puckrin concluded that, despite short-term volatility, Bitcoin’s long-term trajectory depends more on the U.S. Dollar Index than on geopolitical developments. “The DXY just dropped below 100, the lowest in three years,” he noted. “If the dollar keeps weakening, Bitcoin could recover strongly.”
As hostilities escalate, financial markets are expected to stay volatile. With safe havens in high demand and geopolitical uncertainty dominating headlines, the world is watching carefully to see what happens next in the Israel-Iran dispute.
