March 13, 2026 — The global financial markets have concluded one of the most turbulent weeks in recent memory, as a major geopolitical conflict in the Middle East involving the U.S., Israel, and Iran sent shockwaves across asset classes. The crisis, marked by the temporary closure of the crucial Strait of Hormuz, direct military strikes on Iranian assets, and the resulting inflation impact, caused significant volatility in global commodities, currencies, and equities.
Crude oil prices saw historic intraday surges, while traditional safe-haven assets such as gold and the U.S. dollar rallied as investors sought refuge from uncertainty. However, as diplomatic efforts hinted at a potential de-escalation later in the week, markets began to stabilize, leading to a relief rally for equities and a correction in energy prices.
Below is a detailed breakdown of the week’s key market drivers and their impacts.
Key Takeaways:
- Middle East Conflict: Geopolitical tensions involving the U.S., Israel, and Iran caused a temporary closure of the Strait of Hormuz, disrupting global oil supplies and sparking market turmoil.
- Crude Oil Surge: Oil prices saw historic intraday spikes due to supply concerns, raising fears of stagflation and prolonged inflationary pressures.
- Safe-Haven Rally: Gold and the U.S. dollar surged as investors sought stability amid geopolitical uncertainty.
- Cryptocurrency Stability: Unlike traditional assets, Bitcoin displayed surprising resilience, holding steady around $67,000 during the crisis.
- Inflation Risks Persist: Rising energy costs and sticky inflation keep central banks on alert, with fears of a potential second wave of inflation.
Market Summary (March 9 – 13, 2026)
| Asset/Event | Details | Market Impact |
| Middle East Conflict | Strait of Hormuz closure and direct strikes on Iranian assets. | Extreme Volatility: Surge in Oil and Gold; slump in global risk assets. |
| Crude Oil (WTI/Brent) | Prices spiked ~17% on Monday ($110+), corrected to sub-$90 by Friday. | Inflationary Pressure: Concerns of stagflation initially rattled bond markets. |
| U.S. CPI & PCE | CPI (Feb) held at 2.4%; Core PCE (Jan) released today at 0.4% MoM. | USD Neutral/Bullish: Sticky inflation limits aggressive Fed rate cut bets. |
| Gold (XAU/USD) | Retreated from January ATHs but held support above $5,100/oz. | Safe Haven: Solidified its role as the premier geopolitical hedge. |
| Cryptocurrencies | BTC held ~$67,000; ETH ~$2,000; Solana and XRP showed resilience. | Decoupling: Crypto showed relative stability despite the oil-driven stock crash. |
| Major FX (USD/JPY) | Yen weakened initially but found support on safe-haven flows later. | Carry Trade Risk: JPY remains sensitive to BoJ policy uncertainty and oil costs. |
History Repeating? Comparing the “Double Hump” of the 1970s to Modern Inflation.
This chart overlays the CPI trends of 1966–1986 with our current trajectory (2014–2026). While we’ve seen a significant cooling since the 9.1% peak in 2022, Historical patterns suggest a ‘second wave’ could emerge if central banks ease policy prematurely. The 1970s cycle demonstrated the significant inflation impact that can occur when energy shocks align with policy errors—a risk that remains highly relevant today.
Middle East Conflict Sparks Global Market Turmoil
The escalation in the Middle East unfolded over the weekend, with reports of intensified military actions between Iran, the U.S., and Israel. The temporary closure of the Strait of Hormuz—a critical chokepoint for global oil shipments—triggered panic buying in crude oil futures.
As tensions peaked, the uncertainty reverberated across global markets. Risk assets, including equities, experienced a steep sell-off due to inflation concerns, whereas safe-haven assets like gold and the U.S. dollar witnessed a significant surge in demand driven by their appeal during inflationary periods. The geopolitical crisis also raised concerns about prolonged inflationary pressures, with energy prices threatening to push input costs higher across industries.
By midweek, diplomatic comments from key global leaders hinted at a potential de-escalation of the crisis. This provided some relief to markets, allowing crude oil prices to retreat below $90 per barrel by Friday as fears of a prolonged supply disruption eased.
Crude Oil: Historic Volatility Amid Supply Concerns
Crude oil markets experienced one of their most volatile weeks in recent history. The initial closure of the Strait of Hormuz—a maritime route that handles approximately 20% of global oil trade—triggered panic buying in crude oil futures.
- West Texas Intermediate (WTI): Prices surged by nearly 17% on Monday, briefly crossing $110 per barrel. However, as news of potential diplomatic resolutions emerged later in the week, WTI corrected sharply and ended Friday trading below $90 per barrel. Today Oil is hovering around $95 per barrel.
- Brent Crude: Similarly, Brent crude experienced a dramatic spike before retracing gains to settle near $89 per barrel by week’s end.
Sharp fluctuations in oil prices have rekindled fears of stagflation—a harmful mix of sluggish economic growth and surging inflation—highlighting the inflation impact and intensifying worries among central bankers and policymakers worldwide.
Gold: The Geopolitical Hedge Holds Strong
Gold once again proved its mettle as the go-to safe-haven asset during times of geopolitical uncertainty. Prices for the precious metal surged early in the week as investors sought shelter from market volatility.
- XAU/USD: Gold prices climbed back toward their January all-time highs (ATHs) before retreating slightly as tensions eased. By Friday, gold remained comfortably above $5,100 per ounce, underscoring its role as a reliable hedge against geopolitical risks.
- Silver (XAG/USD): Silver also saw significant movement, with prices stabilizing near $93 per ounce after a sharp rally earlier in the year.
Despite rising U.S. Treasury yields—often a headwind for non-yielding assets like gold—the metal’s geopolitical risk premium provided strong support throughout the week.
Forex: Dollar Dominates Amid Safe-Haven Flows
The U.S. dollar emerged as a key beneficiary of this week’s market turmoil, bolstered by its status as a global reserve currency and safe-haven asset during crises. The Dollar Index (DXY) traded within the 97.50–98.00 range throughout the week, supported by robust demand and resilient U.S. economic data.
- USD/JPY: The Japanese yen initially weakened due to Japan’s reliance on imported energy but found support later in the week as safe-haven flows returned. However, yen gains were capped by concerns over rising oil costs and ongoing uncertainty regarding Bank of Japan (BoJ) policy direction.
- EUR/USD: The euro struggled against the dollar throughout the week, weighed down by Europe’s proximity to the energy crisis and its reliance on imported oil and gas supplies from the Middle East.
- GBP/USD: The British pound saw some recovery on Friday following a 0.2% GDP growth print for January but remained under pressure due to Bank of England (BoE) rate repricing amid inflationary concerns.
Commodity-linked currencies such as the Canadian dollar (CAD) initially benefited from the oil price surge but gave up gains as energy prices corrected. Europe’s heavy reliance on imported oil and gas has left the euro particularly vulnerable to renewed energy shocks, while Asia’s major economies—Japan, South Korea, and China—face heightened risks from rising oil import costs. Regional dynamics and inflation impact intensify fluctuations in foreign exchange markets amid geopolitical crises. Meanwhile, risk-sensitive currencies like the Australian dollar (AUD) and New Zealand dollar (NZD) were among the worst performers during the week’s risk-off environment.
Cryptocurrencies: A Surprising Source of Stability
In stark contrast to traditional asset classes, cryptocurrencies displayed remarkable resilience during this week’s market turmoil. While global equities saw sharp declines—Japan’s Nikkei lost 6%, and South Korea’s Kospi dropped 8%—Bitcoin (BTC) held steady around $70,000, suggesting an emerging decoupling between digital assets and traditional risk sentiment.
- Bitcoin (BTC): The world’s largest cryptocurrency traded sideways throughout the week, maintaining stability despite heightened geopolitical tensions.
- Ethereum (ETH): ETH hovered near $2,000, continuing its steady uptrend.
- Altcoins: Notable performers included Solana (SOL) and XRP, which managed to post modest gains of 2–3% even as equity markets struggled.
The relative stability of cryptocurrencies during this crisis has fueled speculation that digital assets may increasingly be viewed as “neutral” investment vehicles during geopolitical conflicts that disproportionately impact traditional markets.
Economic Data: Sticky Inflation Keeps Fed on Guard
Amid this week’s geopolitical turmoil, U.S. inflation data remained a focal point for markets:
- CPI (February): Headline Consumer Price Index (CPI) held steady at 2.4%, signaling that inflation remains sticky despite recent Federal Reserve rate hikes.
- Core PCE (January): Released on Friday, Core Personal Consumption Expenditures (PCE)—the Fed’s preferred inflation gauge—rose by 0.4% month-over-month, reinforcing expectations that rate cuts may not be imminent. Globally, core inflation is projected to average ~2.8% in 2026, with the U.S. facing renewed upward pressure while Europe shows signs of moderation. This divergence highlights the risk of uneven monetary policy responses across regions.
The persistence of inflationary pressures has complicated central bank policy outlooks globally, particularly as rising energy costs threaten to exacerbate price pressures further.
Geopolitical Outlook: Risks Linger Despite De-escalation Hopes
While markets have welcomed tentative signs of de-escalation in the Middle East conflict, risks remain elevated. The temporary closure of the Strait of Hormuz has underscored vulnerabilities in global energy supply chains, raising concerns about potential “second-wave” inflationary shocks should tensions flare again. Even if ongoing diplomatic efforts prove successful, the likelihood of renewed conflict remains significant, further exacerbating the inflation impact on global economies. Any fresh disruption in Middle East energy flows could reignite inflationary shocks and trigger another wave of volatility across commodities, FX, and equities.
Key upcoming events will provide further insights into market sentiment:
- University of Michigan Consumer Sentiment Index: Set for release later tonight (New York time), this report will shed light on how American consumers are reacting to recent geopolitical and economic developments.
- Baker Hughes Oil Rig Count: Investors will closely monitor this data point to assess potential changes in U.S. crude production capacity amid heightened market volatility.
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People Also Ask:
What caused the second wave of inflation in 2026?
The second wave of inflation in 2026 was primarily triggered by geopolitical tensions in the Middle East, leading to a surge in oil prices and increased energy costs globally.
How did cryptocurrencies react to the Middle East crisis?
Unlike traditional asset classes, cryptocurrencies like Bitcoin showed surprising stability, holding steady at ~$67,000 during the crisis.
Why is the Strait of Hormuz important for global markets?
The Strait of Hormuz is a vital maritime route that handles approximately 20% of global oil trade. Its closure disrupts oil supply chains, causing significant market volatility.
What are the risks of a second wave of inflation?
A second wave of inflation could arise from energy shocks and premature easing by central banks, similar to the 1970s inflationary cycle.
How did gold perform during the market turmoil?
Gold solidified its role as a safe-haven asset, rallying above $5,100/oz during the crisis before stabilizing later in the week.