From oil spikes to equity swings: How the Mideast conflict is driving markets

• Energy stocks like Exxon Mobil and Shell surged tracking crude's 8%+ jump, while natural gas prices spiked after Qatar halted LNG production (20% of global supply)
• Airlines and travel stocks dropped sharply with the S&P 1500 Passenger Airlines index down nearly 3% due to closed Middle Eastern hubs and rising fuel costs
• Defense stocks climbed 1-4% (Northrop Grumman, Lockheed Martin), shipping companies rose (Maersk up 7.8%), while Middle Eastern dollar bonds and equity indexes declined steeply

Market Summary: Mideast Conflict Drives Global Asset Volatility

Key Event: Escalating Middle East conflict beginning March 2, 2026, involving Israeli attacks on Lebanon, Hezbollah strikes, and Iranian missile attacks on Israel, Gulf states, and Cyprus. President Trump indicated military operations could continue for four weeks.

Energy Markets:

• Crude oil surged over 8% as conflict shut down oil/gas facilities and disrupted the Strait of Hormuz (handles 20% of global oil supply)
• Natural gas spiked after Qatar halted LNG production (20% of global supply)
• Energy stocks rallied: Exxon Mobil and Shell among top gainers; US Natural Gas Fund ETF up 3.7%
• CNX, Williams Companies rose over 1%

Travel Sector Decline:

• Airlines dropped sharply as Middle Eastern hubs closed and fuel costs increased
• S&P 1500 Passenger Airlines index fell nearly 3%
• Affected stocks: Ryanair, IAG, American Airlines, United Airlines
• Travel companies declined: Booking Holdings, Expedia Group
• Hotel chains (Hyatt) and cruise operators (Carnival, Norwegian Cruise Line) fell; Norwegian warned of fuel cost pressures

Defense Sector Gains:

• US defense stocks up 1.1-3.7%: Northrop Grumman, General Dynamics, RTX, Lockheed Martin
• European defense firms climbed: BAE Systems, Rheinmetall, Leonardo

Other Market Moves:

• Shipping stocks surged: Maersk (+7.8%), Hapag-Lloyd (+6.7%), Nordic American Tankers (+3%)
• Gold and dollar strengthened as safe-haven demand increased; dollar index up 0.6%
• Middle Eastern dollar bonds and equities declined sharply (Qatar, Kuwait, Oman, Saudi Arabia)
• Emerging market assets affected, including Egypt and Turkey bonds