South Korean stocks plunge 6%, Japan's Nikkei down 2.5%

Asian stocks plunged in early trade on Wednesday as the ongoing turmoil in the Middle East rattled global markets. 

South Korea's benchmark Kospi index dipped more than six percent after open, while Japan's Nikkei index was down 2.5 percent. 

US stock indexes finished lower on Tuesday (March 3, 2026) as escalating conflict in the Middle East rattled investor confidence and pushed oil prices higher.

The S&P 500 slipped about 0.9%, closing around 6,816, while the Dow Jones Industrial Average fell roughly 0.8%, and the Nasdaq Composite lost about 1%. Smaller stocks underperformed more sharply, with the Russell 2000 dropping nearly 1.8%.

The session was marked by intense morning volatility — the S&P 500 was down more than 2% intraday and the Dow plunged over 1,200 points before some recovery — as investors grappled with the potential economic fallout of widening hostilities following US — Israeli strikes on Iran.

Continued uncertainty and surging crude prices, tied to concerns about disruption in the Strait of Hormuz, added to inflation fears and weighed on risk sentiment.

Winners and losers reflected the market’s risk-off bias.

Defence and energy-related names drew demand on expectations of increased government spending and higher oil prices, while tech and growth stocks lagged as investors rotated away from high-beta assets.

Some smaller speculative names showed extreme moves — highly illiquid micro-caps either spiked or plunged dramatically — a sign of intraday volatility and risk appetite swings among traders.

Treasury yields climbed and volatility indices jumped, highlighting a flight to safety and inflation premium concerns.

Overall, Tuesday’s session emphasized how geopolitical shock waves can swiftly shift market dynamics, turning broad indexes lower amid simultaneous pressure on economic growth expectations and commodity-linked inflation worries.