Global markets plunged on March 4, 2026, as intensified U.S.-Israeli strikes on Tehran triggered a risk-off rush, sending Asian indices into steep declines. The energy and defense sectors led the selloff, with crude oil futures surging and volatility spikes across equity markets.
- Crude oil futures (CL=F) rose 6.3% to $98.40 per barrel on Middle East escalation fears
- Asia's major indices dropped 2.5% to 3.1%, with Nikkei 225 and KOSPI leading declines
- CBOE Volatility Index (^VIX) jumped to 31.7, signaling a sharp risk-off shift
- Apple (AAPL) shares fell 2.4% despite positive earnings guidance
- Yen weakened to 152.1 per dollar amid safe-haven flows into U.S. Treasuries
- Defense sector saw divergent moves: some stocks rose on conflict-related demand, others declined due to macro risk
Asian equity markets plunged on March 4, 2026, following coordinated U.S.-Israeli strikes on military targets in Tehran, Iran, on the previous day. The attack, which targeted a police station and adjacent infrastructure, significantly escalated regional tensions, prompting a sharp reversal in investor sentiment. Stock indices across Tokyo, Seoul, and Hong Kong posted losses exceeding 2.5%, with Japan’s Nikkei 225 dropping 2.8% and South Korea’s KOSPI falling 3.1% in early trading. The energy sector was among the hardest hit. Crude oil futures, tracked by CL=F, surged 6.3% to $98.40 per barrel, reflecting heightened fears of supply disruptions in the Strait of Hormuz and broader oil market instability. Meanwhile, defense contractors saw mixed reactions: stocks tied to aerospace and missile defense systems, such as those linked to U.S.-based firms with Middle East operations, rose on speculative demand, but overall sector sentiment turned negative due to fears of prolonged conflict. Volatility spiked globally, with the CBOE Volatility Index (^VIX) climbing to 31.7—its highest level since late 2023—indicating heightened uncertainty. Equity derivatives markets showed increased put option activity, particularly on technology and industrial names. Apple Inc. (AAPL) saw its shares fall 2.4% despite strong earnings guidance, as investors rotated out of growth stocks into safer assets. The sell-off extended beyond equities, with Asian bond yields rising and the yen weakening to 152.1 per dollar amid safe-haven demand for U.S. Treasuries. Market participants now anticipate elevated risk premiums across commodity and currency markets, with potential ripple effects on global supply chains and inflation forecasts.