By Mike Dolan
March 23 –
What matters in U.S. and global markets today
By Mike Dolan, Editor-At-Large, Finance and Markets
President Trump’s 48-hour deadline for Iran to fully open the Strait of Hormuz, which expires on Monday, has sent stocks and bonds plummeting around the world as the Middle East conflict intensifies.
Trump threatened to “obliterate” Iran’s major power plants if Tehran didn’t comply with his demand. Iran said it would retaliate by hitting energy and water plants across the Gulf. We’re now in the fourth week of the war and there’s no sign of de-escalation. Quite the opposite.
I’ll get into that and more below.
But first, listen to the latest episode of the Morning Bid podcast, where I discuss today’s global selloff – and the curious disappearance of investors’ usual hiding places.
Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.
TICKING TIME BOMB
The global Brent crude benchmark passed $113 per barrel on Monday morning, while West Texas Intermediate (WTI) hit $100 before easing back. Average U.S. gas pump prices are now threatening to top $4 per gallon.
Major stock indexes in Asia fell on Monday, with Japan’s Nikkei closing down 3.5%, bringing its March losses to over 12% so far. South Korea’s KOSPI shed nearly 6%, meanwhile, as a trading curb was activated for the fourth time this month.
MSCI’s gauge of global equities has now fallen to its lowest point since November 2025. European shares opened lower on Monday morning, with the STOXX 600 falling more than 2% to hit a four-month low. Wall Street futures were in the red ahead of the bell.
At the same time, government bonds have been hit everywhere, extending last week’s selloff. Ten-year U.S. Treasury yields rose to their highest levels in nine months, with no additional Fed easing priced into the futures curve this year. In fact, Fed futures now see a 75% chance of a rate rise by year end.
And wary of the potential outsized inflation impact from the energy shock, money markets now also see three interest rate rises from both the European Central Bank and Bank of England for the rest of the year.
Not only are bonds not providing a safe harbour, but gold continues to slide too, leaving cash looking like the only option for many. The dollar edged up against a basket of major currencies.
Meantime, the Japanese government signalled its preparedness to intervene to tackle foreign exchange volatility as the yen edged closer to the $160 threshold. The embattled currency has failed to stage a rebound despite recent hawkish remarks from Bank of Japan Governor Kazuo Ueda.
