Global Markets Waver as U.S.-Iran War Deadline Looms and Oil Prices Surge

Global financial markets remained cautious on Tuesday as investors braced for a critical deadline in the ongoing U.S.-Israel war against Iran, which has sent oil prices soaring and renewed fears of stagflation across the world economy.

Crude oil prices held near multi-year highs, with Brent crude futures climbing 0.4% to $110.19 per barrel and U.S. West Texas Intermediate rising 0.8% to $113.31, as Iran's closure of the Strait of Hormuz — a vital chokepoint responsible for roughly one-fifth of global oil and natural gas supply — continued to fuel energy market volatility. The conflict, which erupted in late February, has severely disrupted international trade routes and stoked inflationary pressure worldwide.

President Donald Trump set an 8 p.m. Eastern Time Tuesday deadline for Iran to reach a peace agreement, warning of devastating consequences if no deal materialized. Iran, however, insisted on a permanent resolution rather than a temporary ceasefire and refused to reopen the critical waterway, leaving diplomatic progress at a standstill. Analysts warned that any military escalation targeting Iranian infrastructure could trigger retaliatory strikes on Gulf energy facilities, deepening the global supply crisis.

Equity markets reflected the uncertainty. MSCI's Asia-Pacific index edged 0.4% higher, Japan's Nikkei dipped 0.2%, and U.S. stock futures fell 0.55%. Meanwhile, the U.S. dollar remained a preferred safe-haven asset, with the dollar index holding near 100.06, and gold eased slightly to $4,640 per ounce.

Adding to market anxiety, recent U.S. economic data revealed that services sector growth slowed in March while business input costs rose at their fastest pace in over 13 years — a clear signal that the Iran conflict is accelerating inflationary trends. Federal Reserve rate cut expectations have been fully priced out for 2025, as traders brace for a prolonged period of economic turbulence.