Global financial markets suffered a sharp reversal on Thursday after United States President Donald Trump’s national address on the Iran war fell well short of the clear resolution investors had been anticipating, sending oil prices surging past $110 a barrel and wiping out a two-day equity rally.
The Dow Jones Industrial Average fell roughly 600 points after the opening bell, declining 1.3 percent in the morning session. The S&P 500 was also down 1.3 percent and the Nasdaq composite dropped 1.7 percent. Oil prices surged sharply, with the price of a barrel of United States crude rising more than $12 to $113, an increase of 13 percent, while Brent crude jumped more than $8 to reach $109 per barrel.
The decline came after the stock market had rallied 3.5 percent over the previous two trading days on investor hopes that a clear end point to the war would stabilise global energy markets.
Trump told the nation the United States will hit Iran “extremely hard” over the next two to three weeks, adding that the war would not last long while acknowledging that discussions with Tehran are ongoing. The address stopped short of providing a concrete timeline or roadmap for ending the conflict, which has kept oil tanker traffic through the Strait of Hormuz effectively at a standstill for weeks.
Nigel Green, Chief Executive Officer of global financial advisory firm deVere Group, said the speech reintroduced the uncertainty markets had spent several sessions trying to price out. “Markets were beginning to price in more certainty, but this speech reintroduces more ambiguity,” Green said. “Investors were positioning for a clean, short-duration conflict. Now, the picture is more complex.”
Asian markets reversed earlier gains after the address, with Japan’s Nikkei 225 falling 1.4 percent, South Korea’s Kospi dropping 2.82 percent and India’s Nifty 50 down 1.38 percent. European stocks also opened firmly lower, with the pan-European Stoxx 600 shedding more than one percent, led by losses in banking, mining and technology shares.
Stocks managed to claw back much of their losses after Iranian state media reported that Iran and Oman are developing a protocol to monitor vessel transit through the Strait of Hormuz. The Dow ultimately closed down 61 points, while the S&P 500 and Nasdaq each edged slightly higher.
Green warned that the partial recovery does not reflect a return to stability. With no confirmed ceasefire and Iran’s foreign ministry stating the country has no choice but to continue fighting fiercely, he said markets remain driven by shifting probabilities rather than resolved outcomes. “Until there is a clearer understanding of how this conflict ends and what risks remain, markets will stay sensitive to every development,” he said. “This means higher volatility, particularly across equities, oil and currencies.”
Analysts at TD Securities estimated that nearly one billion barrels of oil could be lost by the end of April, comprising up to 600 million barrels of crude and roughly 350 million barrels of refined products, with every additional month of conflict adding a further combined loss of 450 million barrels.
Markets will be closed on Friday for the Good Friday holiday, leaving traders with limited opportunity to react to further developments before Monday.
