Tensions surrounding Iran continue to intensify, spilling over beyond the Middle East and causing significant turbulence in global financial markets. Overnight, U.S. stock markets experienced sharp declines, with the Dow Jones Industrial Average plummeting over 1,100 points at one stage. International oil prices surged dramatically, with the WTI crude April contract rising more than 8%, marking its largest single-day gain since May 2020.

According to reports, on March 5, a spokesperson for Iran’s Khatam al-Anbiya Central Headquarters stated that the U.S. aircraft carrier USS Abraham Lincoln was struck by an unmanned aerial vehicle operated by the Islamic Revolutionary Guard Corps Navy in the Sea of Oman, approximately 340 kilometers from Iranian territorial waters. On the same day, the Israeli Defense Forces announced that the Israeli Air Force had launched a new round of airstrikes on targets in Tehran, the capital of Iran.

On March 6, U.S. time, all three major U.S. stock indices closed lower. The Dow Jones Industrial Average fell 1.61%, after dropping more than 1,100 points during the session. The Nasdaq Composite declined 0.26%, while the S&P 500 dropped 0.57%.

Large-cap technology stocks showed mixed performance. Broadcom surged over 4%, Microsoft rose more than 1%, and Amazon gained nearly 1%, with Nvidia posting a slight increase. In contrast, Meta fell over 1%, while Apple, Google, and Tesla registered minor losses.

Oil prices climbed sharply, with the WTI crude April contract jumping 8.5% to surpass $81 per barrel, its largest single-day gain since May 2020. The Brent crude April contract rose 4.93% to $85.41 per barrel. So far this week, WTI and Brent crude have accumulated gains of over 20% and 17%, respectively, as concerns over potential disruptions to oil shipments through the Strait of Hormuz intensified.

Reports indicate that escalating conflict appears to have severely disrupted tanker traffic through the Strait of Hormuz. However, Iran’s permanent mission to the United Nations stated on social media that claims of Iran blocking the strait were baseless and absurd, emphasizing Iran’s commitment to international law and freedom of navigation.

Meanwhile, U.S. natural gas futures increased nearly 3%, and diesel futures rose approximately 7%. Rising energy prices could fuel inflationary pressures, complicating the Federal Reserve’s policy outlook and adding downward pressure on equities.

Lee Hardman, senior foreign exchange economist at MUFG, noted that uncertainty remains high, and markets are unable to gauge the duration of the conflict or the extent of disruption to global energy supplies.

Rob Haworth, senior investment strategist at U.S. Bank, highlighted key market concerns: whether shipping through the Strait of Hormuz can resume and how long the conflict will last. While markets had hoped for a short-lived confrontation, the expanding scope of hostilities raises the risk of prolonged disruption, which could significantly dampen sentiment toward risk assets.

In the early hours of March 6, Beijing time, further reports indicated that the USS Abraham Lincoln and its accompanying destroyers rapidly retreated from the area and are now over 1,000 kilometers away. The Islamic Revolutionary Guard Corps announced the launch of the 21st round of its "True Promise 4" retaliatory operation, which combined missile and drone strikes, including the launch of Kheybar Shekan ballistic missiles targeting central Tel Aviv.

Simultaneously, Israel conducted additional airstrikes. On March 5, the Israeli Defense Forces reported launching a new round of strikes on targets in Tehran, described as the 13th such attack since the conflict began and the second that day. Israeli Chief of Staff Zamir stated in a press conference that the military is entering a new phase of operations aimed at further degrading the Iranian regime’s foundational and military capabilities.

The conflict’s spillover is heightening regional tensions. The United Arab Emirates reported another attack on Abu Dhabi on March 5, with its national emergency management authority stating that air defense systems were responding to missile threats.

Azerbaijan’s President Aliyev convened a security committee meeting, accusing Iran of carrying out a terrorist drone attack on Azerbaijani territory. He ordered the armed forces to prepare and implement retaliatory measures.

According to official sources in Bahrain, a facility at the country’s primary oil refinery was struck by an Iranian missile, causing a fire. The blaze has been fully contained, with no casualties reported, and refinery operations continue. Damage assessments are underway.

Qatar’s Ministry of Defense issued a statement on March 5 confirming a missile attack on the country. Loud explosions were heard in the capital, Doha, prompting the Interior Ministry to issue a nationwide security alert and raise the country’s security level.