Global Markets Shaken as Iran War Escalates, Oil Surges

Wall Street experienced another volatile week as the conflict with Iran intensified, driving oil prices higher and sparking fears of stagflation. Despite the geopolitical tensions, the S&P 500 has demonstrated relative resilience, remaining just 5% below its 2026 high, though it closed at its lowest level of the year on Friday.

Market Performance

The S&P 500 fell 1.6% this week, marking its third consecutive weekly decline. The Dow Jones Industrial Average and Nasdaq Composite shed approximately 2% and 1.3%, respectively, over the same period. As of Friday, March 12, 2026, the S&P 500 closed at 6,632.19, the Nasdaq Composite at 22,105.36, and the Dow Jones Industrial Average at 46,558.47.

Oil Price Surge

Oil prices continued their upward trajectory, with Brent crude surpassing $100 per barrel for the first time since August 2022. Brent crude settled at $103.14 a barrel, a 2.7% increase, even as West Texas Intermediate (WTI) crude rose 3.1% to $98.71 per barrel. This surge is largely attributed to disruptions in traffic through the Strait of Hormuz, a critical shipping route, following the outbreak of the war.

Geopolitical Factors

The escalation of tensions stems from Iran’s actions, which have effectively halted cargo traffic through the Strait of Hormuz. Iran’s new supreme leader has vowed to continue attacks on Gulf Arab neighbors and leverage the closure of the Strait as pressure against the United States and Israel. In response, President Trump ordered strikes on Iranian military assets on Kharg Island, though oil infrastructure was not impacted. He indicated a willingness to target such structures if Iran persists in blocking the Strait.

Potential for Coalition

There are indications of a potential international effort to secure the Strait of Hormuz. Reports suggest the U.S. Is preparing to announce a coalition of countries to escort ships through the critical waterway.

Analyst Perspectives

Despite the geopolitical uncertainty, some analysts remain optimistic. Ed Yardeni, president of Yardeni Research, noted that the S&P 500’s resilience is linked to increasing bullishness regarding industry analysts’ earnings per share estimates for 2026 and 2027. However, he also acknowledged a disconnect between these estimates and the potential negative consequences of a prolonged war and the closure of the Strait of Hormuz.

Looking Ahead

Investors will be closely monitoring developments in the Iran conflict, as well as key economic events. The Federal Reserve is scheduled to hold its second monetary policy meeting of the year, whereas no changes to interest rates are anticipated. Nvidia’s GTC conference is set to start, potentially influencing the technology sector.