Stocks Slide Amid Rising Middle East Tensions; Oil Surges 5%, Dollar Gains Ground
U.S. equity markets concluded Wednesday’s trading session with mixed results, as escalating geopolitical tensions in the Middle East exerted upward pressure on government bond yields and the U.S. dollar, negatively impacting overall market sentiment. The Nasdaq Composite saw a slight increase of less than 0.1%, closing at $22,716.14, buoyed by gains in technology stocks. Conversely, the S&P 500 dipped 0.1% to $6,775.80, while the Dow Jones Industrial Average fell 0.6% to $47,417.27. Sector performance varied, with energy and technology stocks advancing, while consumer staples and real estate sectors faced declines.
Geopolitical Tensions Impact Markets
The rise in Treasury yields was a direct response to the intensifying conflict between Israel and Iran. The 10-year U.S. Treasury yield increased by 9.2 basis points to 4.23%, and the 2-year yield rose 8.4 basis points to 3.65%, indicating heightened risk premiums in global markets. On the economic front, inflation data remained stable, with the headline Consumer Price Index (CPI) holding at 2.4% and core CPI at 2.5%, suggesting that inflationary pressures are currently contained.
In Thursday’s trading session, markets opened lower, with the S&P 500 down 0.72% to $6,716 and the Nasdaq declining 0.70% to $24,772. The surge in energy prices was notable, with West Texas Intermediate (WTI) crude rising approximately 5%. This increase reflects growing concerns over potential supply disruptions, particularly following reports that three commercial ships were struck near the Strait of Hormuz. In response to these developments, the International Energy Agency (IEA) announced that its 32 member countries would release a record 400 million barrels of oil from emergency reserves to mitigate supply disruptions linked to the Iran conflict.
Market Sentiment and Technical Analysis
From an intraday trading perspective, the significant rise in oil prices and heightened geopolitical tensions suggest a bearish bias for equities. Higher energy costs and risk aversion could further pressure market sentiment. Investors are also closely monitoring upcoming earnings results from Adobe and Lennar, which may provide additional direction for the markets.
Technically, the S&P 500 has immediate support at $6,710, which is last week’s low, followed by the 200-day Simple Moving Average (SMA) at $6,619, and this week’s low at $6,579. Immediate resistance is observed at $6,848 (100-day SMA), followed by the 50-day SMA at $6,888, and last week’s high at $6,901.
Oil Prices and Global Supply Concerns
On Wednesday, crude oil prices rose, with WTI closing the session 2.23% higher and Brent up 2.27%. Both oil benchmarks are rallying by about 5.5% during the Asian session on Thursday, with Brent reclaiming levels above $100 per barrel. The ongoing tensions from the U.S.-Israel and Iran conflict continue to impact critical energy infrastructure. Reports indicate that two oil tankers were attacked in Iraqi waters, prompting the nation to suspend operations at its terminals. Additionally, a key oil export terminal in Oman was evacuated as a precautionary measure, highlighting risks to global energy supplies.
These developments overshadowed the release of the largest emergency oil reserves by G-7 countries, contributing to the spike in prices. Market participants are increasingly viewing this situation as a threat to the security of oil flows and rising transportation costs rather than a mere supply disruption. The International Monetary Fund (IMF) has suggested that a sustained 10% increase in energy prices could push global inflation up by 40 basis points and slow economic growth by 0.1-0.2%.
From a technical standpoint, the daily chart for WTI has printed a dragonfly doji, reinforcing the bullish momentum observed today. The low around $81.86 coincided with the 9-day EMA level, indicating potential support near the $83.38 mark. If prices break above today’s high around $96, buying momentum may continue.
U.S. Dollar Strengthens Amid Tensions
The U.S. dollar is gaining momentum, rising 0.34% on Wednesday and crossing the $99 resistance level. The greenback is up 0.23% this morning, reaching $99.48, as geopolitical tensions remain elevated. The dollar’s bullish trend is supported by the ongoing situation in the Middle East.
Oil prices fluctuated from $100 to $85 as both Washington and Tehran indicated that conflict and escalation were nearing an end, only for those assurances to be undermined. Brent is again trading at $95 per barrel as Iran targets energy infrastructure in Oman. Tensions in the Strait of Hormuz have escalated, with incidents involving a Thai, Japanese-flagged container, and a UK Maritime vessel. These attacks coincided with the decision of 32 countries to release 400 million barrels of oil.
The dollar’s strength is further bolstered by the U.S. being a net importer of oil, maintaining its safe-haven status. The Consumer Price Index (CPI) for February came in at 2.4%, as anticipated, leading markets to downplay its impact on the dollar.
From a technical perspective, the dollar is positioned above the 9, 21, 50, 100, and 200-day SMAs. Since January 27, the DXY has been respecting an ascending channel, with major resistance at $99.76 and potential support at $99.26, the close from yesterday. The MACD indicator shows momentum buildup at 0.15, while the RSI is trending upwards at 66, indicating further room for movement.
Precious Metals Market Update
Gold is trading nearly flat at $5,160, while silver has increased by 0.87% to $86.49. Gold is entering a more stable phase, transitioning from a geopolitical hedge to a buffer against broader economic shocks. Prices above $5,150 reflect a balance between safe-haven demand and pressures from a stronger U.S. dollar and higher real interest rates.
Volatility in gold has eased, with the Gold Volatility Index dropping from a late-February spike around 40 to its current level of 30. The VIX remains elevated near 25, suggesting that markets are viewing equities as the primary channel for war-related risks. A similar pattern was observed after the 2022 Ukraine war, where oil-driven inflation kept interest rates high, limiting gold’s ability to maintain a crisis premium.
The IEA’s announcement of a record 400-million-barrel release of strategic oil reserves has been viewed as insufficient given the disruptions in the Strait of Hormuz, pushing Brent crude back above $95 and raising inflation expectations. Recent inflation data appears moderate, with headline CPI at 2.4% year-over-year and core CPI at 2.5% for February, figures predating the latest oil shock. European officials have warned that inflation could exceed 3% this year, reinforcing the risk of tight global monetary policy.
Central bank demand for gold shows mixed signals. Net purchases in January dropped to about 5 tons, significantly below the 27-ton monthly average seen in 2025. Concerns arose after Poland, the largest central bank buyer last year, discussed using profits from its gold reserves to fund a $47 billion defense plan. However, the National Bank of Poland clarified that this would involve unrealized profits rather than selling physical gold, and its buying program remains unchanged.
Gold is showing signs of fading upward momentum, with key resistance around $5,185–$5,210. A 4-hour close above $5,230 would signal renewed strength, potentially leading to a move toward $5,300. On the downside, the $5,133 and $5,105 levels are acting as main intraday pivots; falling below these levels could confirm a deeper pullback toward $5,060.
Silver prices have been forming lower highs, indicating that buyers are struggling to regain control, with immediate resistance at $87.50. For sentiment to improve, silver needs to break above the $89.8 resistance. Support is located near $83.3 and $81.
Gold Prices in the UAE
24k: AED 619.75
22k: AED 574.00
21k: AED 550.25
18k: AED 471.75
14K: AED 368.00
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Published on 2026-03-12 21:18:00 • By Editorial Desk
