Global Markets Reel as Middle East Tensions Surge, Oil Hits $98.60 Amid Stock Slide

Global equity markets declined sharply on March 2, 2026, as renewed hostilities in the Middle East intensified investor fears of supply disruptions and regional spillover. The Nikkei 225 fell 2.8%, erasing gains from the prior session and marking its steepest daily drop in over three months. Similar declines were seen across major benchmarks, reflecting broad-based risk aversion. The surge in geopolitical tension drove crude oil prices higher, with Brent crude reaching $98.60 per barrel, a 6.3% increase on the day. U.S. West Texas Intermediate (WTI) crude also climbed to $94.20, driven by concerns over potential disruptions to key shipping lanes through the Red Sea and Persian Gulf. Energy producers and related infrastructure firms saw elevated trading volumes as investors adjusted positions. Market volatility spiked as the CBOE Volatility Index (^VIX) closed at 28.7, the highest level since late 2024, signaling increased uncertainty and fear among traders. The rally in safe-haven assets included a modest rise in U.S. Treasury yields and strengthening of the Japanese yen, reflecting capital flows seeking stability. The defense sector saw heightened activity, with U.S. and European defense contractors registering gains on speculation of increased military spending and potential escalation. The broader impact extended to global shipping and insurance markets, where freight rates and risk premiums began to climb amid growing uncertainty over maritime routes.