The war between U.S.-Israel and Iran has only escalated following the assassination of Iran's Supreme Leader Ayatollah Ali Khamenei.
Iran is targeting U.S. and Israeli military bases in Gulf states such as Saudi Arabia, Qatar, the United Arab Emirates, Bahrain, Kuwait, and Jordan.
Most shipping vessels are stranded near the Strait of Hormuz due to the conflict, and after Iran's drone attack hit the Aramco-owned Ras Tanura refinery, Saudi Arabia shut down the refinery.
Related: 'Rich Dad Poor Dad' author has blunt take on gold rally amid Iran war
Oil prices soar
Following the sharp escalation, oil prices have surged significantly.
The West Texas Intermediate (WTI), the crude oil benchmark in North America, has soared 6.7% today to trade at $71.56 per barrel at the time of writing.
Brent Crude, the global oil benchmark, has soared 8% today to trade at $78.72 per barrel at press time.
Natural gas has risen around 4.5% to $2.98/mmbtu.
U.S. market opens lower
As trading opened in the U.S. after the weekend, all the leading market benchmarks opened lower on March 2.
The S&P 500, the index tracking the performance of 500 leading companies listed on stock exchanges in the United States, fell 0.28% to 6,859.40 points. The benchmark reached above 7,000 points in late January to reach a record high.
The Nasdaq Composite, the index that includes almost all stocks listed on the Nasdaq stock exchange, fell 0.24% to 22,614.14 points. The index surpassed 24,000 points in late October last year to reach a record high.
The Dow Jones Industrial Average (DJIA), the index of 30 major companies listed on stock exchanges in the U.S., fell 0.21% to 48,872.94 points. The DJIA reached above 50,000 points on Feb. 10 to hit its highest point.
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Analyst warns Bitcoin, Ether could drop 10%-20%
If the war in West Asia doesn't end soon, there could be sharper reactions in the global markets.
Crypto Council for Innovation advisor Sean Lee told TheStreet Roundtable in emailed comments that the markets were betting on the Federal Reserve continuing its easing cycle before the flare-up, "potentially another 25-50 bps cut by mid-2026."
But the oil price surge amid the war has changed everything. Lee warned,
"But the oil shock from this war might flip the script: it's a classic supply-side inflation driver that complicates the Fed's dual mandate."
In fact, if the price of oil surpasses $120 per barrel, it could "ignite inflation fears," squeeze global liquidity, and trigger outflows from "speculative assets," he added.
In simple words, a potential surge in inflation due to higher transport costs following oil rally could push back expectations for the next rate cut. If there is lower liquidity, traders could withdraw from "speculative assets" like cryptocurrencies and flock to traditionally safer assets like gold.
Lee even alerted that Bitcoin (BTC) and Ethereum (ETH) could drop 10%-20% in a "flash crash scenario," similar to past geopolitical shocks.
The last flash crash in the crypto market happened on Oct. 10 last year when U.S. President Donald Trump issued another tariff threat against China. Over $19 million got wiped out from the market in a day, and the digital assets markets are yet to recover from the shock.
The two leading cryptocurrencies have surged 2% and 1% over the last 24 hours, with BTC and ETH trading at $68,514.44 and $2,032.02 at press time.
Related: Khamenei dead, 75% chance Iran names new Supreme Leader by March 31
This story was originally published by TheStreet on Mar 2, 2026, where it first appeared in the MARKETS section. Add TheStreet as a Preferred Source by clicking here.
