Global markets fall on Thursday, March 5, 2026, as it was the 6th day of Iran war fueling stagflation fears with oil surging to $84/bbl highs (last seen mid-2024), bond yields spiking, and risk assets hammered—yet Nasdaq clings flat weekly amid false dawn diplomacy hopes.
S&P 500 sank >1.5%, Wall Street closed down on Middle East fallout, while Europe tumbled (STOXX 600 -1.3%) as Hormuz disruptions and energy supply risks ignited inflation panic, overriding safe-haven flows.
FX & Bond Shocks
U.S. dollar jumped higher across the board, and crushed EM currencies: South African rand & Chilean peso -2%, AUD worst G10 loser -1%. U.S. yields up 6bps (10-year ~4.1%), curve steepens; UK yields +10bps (week +30bps); German 2-year Schatz +25bps—biggest 3-year weekly jump—on stagflation bets. Global Markets are in very tension.
Mohamed El-Erian warns: Prolonged war risks global stagflation grip, tipping resilient economy post-2022 shocks into inflation + slow growth hell.
Mid-East Conflict Drives Chaos
U.S.-Israeli attacks expand, Iran retaliates—war spreads messy, entrenches. Wednesday’s U.S.-Iran back-channel optimism sparked brief rallies (Europe/Wall St up), but Reuters calls it false dawn: Energy/bond spikes pressure risk assets.
Expert Warnings & Outlook
Strategists split: JPM sees buy opps, Wells Fargo bets Fed ignores oil blip—but Hormuz/Red Sea blocks (20% world oil) test resilience. Friday U.S. payrolls pivotal: Hot data = no cuts; watch ECB too.
For Patiala traders: Rupee eyes ₹92/$ pressure on oil (India imports 85%); long MCX crude/gold, short Nifty <25,800; hedge EM via USD. Stagflation trinity (hot CPI, weak growth, yields up) looms—no complacency as war drags!
About The Author
