Global stock markets dropped sharply on Thursday while the U.S. dollar rose, as investors rushed to safe-haven assets amid growing fears of a wider war in the Middle East. The sharp moves came as tensions escalated between Israel and Iran, with the world waiting to see whether the United States will join the conflict.
Speaking outside the White House, President Donald Trump gave no clear answer on U.S. involvement, saying only, “I may do it. I may not do it.”
The uncertainty has pushed oil prices higher, with Brent crude rising 2% to $78 a barrel, its highest level since January. Oil has now climbed 11% in the past week, driven by fears of supply disruptions from the region.
In Europe, the STOXX 600 index fell 0.6%, heading for its worst week since April. U.S. stock futures also dropped nearly 1%, although Wall Street was closed for a public holiday.
“The risk of a wider conflict is real,” said Kyle Rodda of Capital.com. “If the U.S. gets involved, we could see direct retaliation from Iran and more pressure on global energy supplies.”
Meanwhile, central banks across Europe faced challenges balancing inflation and weak growth, especially with Trump’s unpredictable trade policies adding to market uncertainty.
Gold was steady at around $3,365 an ounce, while the dollar strengthened against major currencies, including the euro, Australian, and New Zealand dollars.
The Federal Reserve kept interest rates steady this week, frustrating Trump, who has pushed for deeper rate cuts despite persistent inflation concerns.
With oil surging, stocks falling, and currencies fluctuating, global markets remain tense as geopolitical risks continue to grow.
