Global financial markets opened the week in crisis mode on Monday, March 2, 2026, as investors scrambled to reprice risk following the United States and Israel's joint weekend military campaign against Iran, which included strikes reported to have killed Supreme Leader Ayatollah Ali Khamenei. The operation, publicly identified as Operation Epic Fury, triggered one of the most dramatic market sessions in years across equities, commodities, currencies, and fixed income.
Brent crude surged as much as 13 percent to $82 per barrel at the open — a 14-month high — before paring some gains as investors assessed the likelihood of a prolonged conflict. West Texas Intermediate crude, the U.S. benchmark, reached $72.39 per barrel intraday, its highest level since June. Energy analysts warned that any sustained closure of the Strait of Hormuz, through which approximately 20 percent of the world's daily oil supply passes, could push prices toward $100 per barrel or higher.
Gold, the classic safe-haven asset, surged nearly 2 percent to test $5,400 per ounce — its highest reading since late January — as investors poured capital into defensive positions. Silver rose in tandem, while the U.S. dollar index climbed to 98.2 as safe-haven demand and higher oil prices supported the greenback. Meanwhile, CBOE's Volatility Index, Wall Street's so-called fear gauge, jumped to its highest level of 2026, reflecting elevated uncertainty across asset classes.
U.S. equity benchmarks opened sharply lower, with the S&P 500 falling as much as 1.4 percent before paring losses. The Nasdaq Composite briefly shed 1.6 percent before recovering slightly as technology heavyweights including Nvidia and Microsoft found buyers. The Dow Jones Industrial Average was down roughly 0.2 percent in afternoon trading, well off its session lows of more than 480 points. Declines were broad-based, with Amazon and Apple each losing more than 1 percent, and JPMorgan and Bank of America each off approximately 2 percent.
Defense stocks were among the session's standout gainers. Lockheed Martin shares surged more than 6 percent, Northrop Grumman advanced 5 percent, RTX Corporation gained approximately 4 percent, and drone manufacturer AeroVironment surged more than 10 percent as investors anticipated a prolonged military engagement and elevated global defense spending. Energy producers similarly outperformed, with Exxon Mobil and Chevron each advancing more than 4 percent and ConocoPhillips gaining more than 5 percent.
Airline stocks bore the brunt of the selloff. United Airlines — the most internationally exposed U.S. carrier — plunged more than 6 percent. American Airlines and Delta Air Lines each fell more than 5 percent on the combined headwinds of higher jet fuel costs and widespread route disruptions, particularly across Gulf hub cities including Dubai. Hotel chains Marriott International and Hilton Worldwide slid 5 percent and 3 percent, respectively. Travel platforms Expedia and Booking Holdings each dropped more than 3 percent.
Iran launched retaliatory missile and drone strikes on Israeli territory and U.S. military installations in Gulf states, while its Islamic Revolutionary Guard Corps issued warnings prohibiting vessel passage through the Strait of Hormuz. Analysts at Evercore ISI characterized market behavior as relatively orderly given the dramatic nature of the weekend events, projecting that a scenario of oil trading near $80 per barrel in a relatively short-lived conflict would produce only limited long-term economic damage. Wells Fargo strategists outlined a base case that still targets the S&P 500 at 7,500 by year-end, but warned that a prolonged closure of the Strait could push the index toward 6,000.