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According to reports, thick smoke billowed out after an explosion in Tehran on February 28, 2026. (AFP photo source: Getty Images)
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Market watchers are bracing for turmoil after the United States confirmed it had launched “significant combat operations” in Iran, a move investors said could have greater market consequences than a series of recent geopolitical conflicts.
U.S. President Donald Trump said the U.S. military has begun “major combat operations“In Iran.
Reuters quoted an unnamed Iranian official as saying that several ministries south of the Iranian capital, Tehran, were targeted.
The market has not been affected Get used to absorbing recent geopolitical and economic shocks and headlines, including Trump announces increase in all U.S. import tariffs to 15%as well as the government’s Former Venezuelan President Nicolás Maduro arrested.
“It’s certainly going to have a bigger impact than Venezuela,” said Florian Weddinger, co-chief investment officer at St. Lucia Asset Management.
“Venezuela… is only really relevant to people who care about this particular heavy crude,” Weidinger told CNBC. The country’s heavy, high-sulfur crude can Extraction is challengingalthough valued by certain complex refineries, particularly in the U.S.
“That’s why the risk is greater. So you expect oil prices to rise more sharply next week,” he added.
Oil prices soar, turn to safety
Venezuela Currently producing an average of 800,000 barrels of crude oil per daywell below the peak of 3.5 million barrels per day in the 1990s.
“Venezuela is a production story. (Iran) is a choke point story,” said Kenneth Ng, director of UOB Kay Hian Private Wealth Management in Singapore.
The strait is located in the gulf between Oman and Iran Considered one of the world’s most important oil chokepoints. According to data provided by market intelligence company Kpler, approximately 13 million barrels of crude oil will pass through the Strait of Hormuz per day in 2025, accounting for approximately 31% of global seaborne crude oil flows.
In June 2025, when Israel attacked Iranian nuclear facilities, stocks sold off sharply at the opening, then rebounded when it became clear that the strait was undisturbed.
“This is the pattern that the market will look to on Monday,” Goh said, adding that as the dollar and yen strengthen, investors may flock to safety assets and pile into gold.
Other market watchers echoed the sentiment. Alicia García-Herrero, chief economist for Asia Pacific at Natixis, also expected Monday’s opening to be “tough and risk-off”, with global stock markets likely to fall 1% to 2% or more, U.S. Treasury yields falling 5 to 10 basis points, and oil prices rising 5% to 10%.
But she said there was “no heroic bet” and warned investors to wait for Iran’s response.
Short-term campaigns and “regime change efforts”
Still, some fund managers said safe-haven positions have been building for weeks and may provide some cushion against the initial volatility once trading begins.
Weidinger noted that some cross-asset moves have reflected “a little bit of a crisis environment,” citing strength in oil and strong demand for U.S. Treasuries in recent weeks.
While markets had anticipated this development, investors are paying close attention to whether the latest U.S. move remains a short-lived, focused operation or escalates into a longer-term regional conflict.
Quantum Strategy’s David Roche sheds some light on the duration and the market implications of whether Iran will try to close the Strait of Hormuz. He said risk aversion and rising oil prices could be short-lived if the conflict is short-lived and contained.
If it turns into a longer, three- to five-week “regime change effort,” markets will react “pretty badly” as investors factor in a broader conflict and longer oil outages. In this case, Roach told CNBC he would increase gold holdings to about 15% of his portfolio as a defensive hedge.
Billy Leung, investment strategist at Global He expects global equities to open lower with increased volatility, especially in high-beta and cyclical sectors.
