The geopolitical standoff between the United States and Iran has entered its sixth day, with Tehran refusing to de-escalate despite mounting international pressure.
The conflict, which recently saw Iranian strikes on a US base in Syria and a tanker hit near Oman, is shifting from a diplomatic dispute to a tangible threat to global trade routes.
Investors are increasingly focused on the Strait of Hormuz, a critical chokepoint for global oil and gas shipments, as the risk of a physical blockade or severe restriction of passage grows.
This escalation is having immediate repercussions beyond the energy sector.
While oil prices have spiked, weighing heavily on consumer sentiment and inflation expectations, the broader equity markets are also feeling the strain.
The DAX has failed to hold higher levels, and benchmarks across Europe and Asia are retreating as traders assess the likelihood of a broader conflict.