Nasdaq to lead retreat as Wall Street reacts to US war on Iran

• WTI crude jumped 7.8% to seven-month highs above $72/barrel, while spot gold rose 2.4% to above $5,400/ounce near all-time highs amid geopolitical uncertainty
• Over 1,555 flights out of 5,340 scheduled to the Middle East on March 2 were cancelled, with Dubai International Airport and Doha's main airport suspending operations indefinitely
• The VIX volatility index initially spiked 22% overnight but later moderated to a 17% increase, with analysts warning that prolonged closure of the Strait of Hormuz would cause non-linear supply disruptions

Market Summary: US-Iran Conflict Triggers Market Retreat

Key Developments:

US stocks are set to open sharply lower following military strikes between the US-Israel coalition and Iran. The Nasdaq futures fell 1.6%, while Dow Jones and S&P 500 futures declined approximately 1.2%. Tech stocks are expected to lead the selloff when trading begins.

Geopolitical Situation:

Operation Epic Fury resulted in the reported assassination of Iran's supreme leader and senior officials. Iran retaliated with missile and drone attacks across Gulf states including Qatar, UAE, Saudi Arabia, Bahrain, and Kuwait, killing four US service members. The critical Strait of Hormuz remains effectively disrupted with tankers anchoring, though not technically closed.

Commodity Impact:

• WTI crude oil surged 7.8% to seven-month highs above $72/barrel
• Spot gold jumped 2.4% to above $5,400/ounce, near all-time highs
• Natural gas prices also increased significantly

Travel Disruption:

Dubai International Airport suspended all operations "until further notice," with Doha's airport also closed. Of 5,340 flights scheduled to the Middle East on March 2, 2026, 1,555 were cancelled according to Cirium data.

Market Analysis:

The VIX volatility index spiked 22% overnight before moderating to a 17% gain. Analysts note the severity depends on Strait of Hormuz closure duration, given the "non-linear nature of supply constraints." European markets saw travel, banking, and retail stocks declining, while defense and energy sectors gained.

Market vulnerability is heightened by pre-existing concerns around tightened financial conditions and private lending credit exposures. Analysts emphasize markets "hate uncertainty" and "price fear fast," though recalibration occurs quickly once facts clarify.