Stock indices plunged and crude oil prices jumped sharply on Monday, March 2, 2026, amid escalating conflict in the Middle East. The Nikkei 225 dropped 3.8%, while West Texas Intermediate oil surged past $97 a barrel, triggering a risk-off environment across global markets.
- Nikkei 225 fell 3.8% to close at 31,825
- CL=F crude oil rose 5.3% to $97.42 per barrel
- ^VIX increased 28% to 26.7
- 10-year U.S. Treasury yield declined to 4.12%
- Defense stocks edged higher in early trading
- Global equity sell-off driven by risk-off sentiment
Global equity markets reversed course on Monday as renewed hostilities in the Middle East triggered widespread selling. The Nikkei 225 closed down 3.8%, or 1,245 points, marking its steepest one-day decline since late 2024. Investors rapidly shed risk-sensitive assets, with technology and export-oriented equities bearing the brunt of the sell-off. The energy sector was the primary beneficiary of the turmoil, as crude oil futures surged. Light sweet crude (CL=F) climbed 5.3% to settle at $97.42 per barrel, fueled by fears of supply disruptions in key shipping lanes. The move pushed the energy component of the S&P 500 up 4.1% during the session, underscoring the direct impact of geopolitical stress on commodity markets. Volatility measures spiked in response. The CBOE Volatility Index (^VIX) jumped 28% to 26.7, reflecting heightened uncertainty and a flight to safety. Treasury yields dipped slightly, with the 10-year U.S. yield falling to 4.12%, as investors sought refuge in government debt amid growing concerns over global trade and energy stability. The market reaction underscored the fragility of global financial conditions in the face of regional instability. Defense stocks saw modest gains, with Lockheed Martin and Raytheon Technologies reporting early gains in pre-market trading, while airline and shipping equities declined on expected route disruptions and increased insurance premiums.