Global markets steady after US strikes Iran: Why investors aren't panicking

Dubai: Even after the US bombed Iran’s nuclear sites, markets didn’t crash. Here’s what’s keeping investors calm — and what could still shake things up.

The US joining Israel in a direct attack on Iran’s nuclear sites may sound like the kind of event that would send stock markets tumbling. But global markets have barely flinched.

Instead of panic selling, investors have largely stayed put. US stocks rose, Tesla rallied 6.7%, and bond yields fell on hopes that interest rate cuts could still be on the table this year.

The key reason is simple: so far, oil is still flowing.

The biggest fear in such a conflict is that Iran might block or disrupt the Strait of Hormuz—a critical oil shipping route through which nearly 20% of the world’s crude passes. That could spike oil prices and hurt economies globally.

But analysts believe that’s unlikely—at least for now. Markets have taken the US action in stride so far in the recognition that Iran has not retaliated and there has been no regional escalation ss far, said Briefing.com analyst Patrick O'Hare.

"There might be some unease in the market as a result of the US-led bombings, but there isn't a fear of any meaningful economic fallout as a result of the US-led bombings," O'Hare said.

Iran depends on the Strait for its own oil exports to countries like China. Blocking it would hurt Iran’s own economy, possibly more than anyone else's.

That’s why US Secretary of State Marco Rubio called any move to shut down the strait “economic suicide” and warned it would draw a military response.

“Hope remains that the war could be short,” said Neil Newman of Atris Advisory Japan. “The one big hit by the Americans might be enough for now.”

Meanwhile, China has called for de-escalation, trying to play a balancing role between all sides.

The UAE is a major oil producer and closely linked to global energy flows. Even if local markets are calm for now, any escalation can shift global sentiment fast, impacting:

For residents, this translates to possible higher fuel, travel, and transport costs down the line, even if those effects haven’t shown up yet.

Not everyone is confident that calm will last. Some experts say markets may be underestimating the risks.

“If the Strait of Hormuz was completely shut down, oil prices would rise to $120 to $130 a barrel,” said Andy Lipow, a Houston-based energy analyst. That could mean petrol prices of $4.50 a gallon in the US, and similar knock-on effects globally.

It would also make it harder for central banks like the Fed to cut interest rates, since higher oil prices feed inflation.

Markets may stay steady for now, but that could change if:

In short, if the conflict spreads or affects the real economy—especially energy supplies—markets could turn quickly.

Markets are holding up because investors believe the conflict won’t spiral out of control. Oil is still flowing, inflation is tame, and central banks aren’t hitting the panic button.

But that calm depends on what Iran does next. For UAE readers, staying informed is key—because while local markets may feel insulated for now, the global ripple effects can reach our wallets if tensions worsen.