Deniz 
Cryptocurrency prices plunged Saturday evening after Iran launched a wave of drones at Israel, signaling the potential for market volatility as investors begin to price in the prospect of a larger Middle East conflict. Bitcoin fell 5% from its Friday price, while ether fell more than 7% and XRP fell 13.5%, according to CoinMarketCap. That is a hint that risky assets will come under pressure.
A more complete picture of Wall Street’s reaction to Iran’s first-ever full-scale military assault on Israel will emerge on Sunday evening, when futures trading for stocks, bonds, commodities, and currencies resumes in the United States.
Effects of the Iran-Israel Conflict on Markets
Friday’s trading hinted at potential developments, with predictions of an imminent Iranian strike on Israel causing US oil prices to surge by up to 3% to $87 per barrel. US Treasury bonds also rallied dramatically, with the 10-year yield falling as much as 10 basis points as investors sought protection. Similarly, the US dollar strengthened against riskier currencies amidst escalating global tensions. The euro dipped to a five-month low against the dollar amid speculation of rate cuts by the European Central Bank.
Gold prices hit a new record high above $2,400 per ounce before retracting. Stocks, particularly tech firms, faced losses on Friday as investors processed bank profits and new inflation data, tempering expectations of rapid Fed rate adjustments. The tensions in the Middle East have heightened since Iranian-backed militants attacked Israel in October, with further conflicts in Lebanon, Iraq, Syria, and Yemen. Tehran accused Israel of a bombing in Syria on April 1 that killed two of Iran’s generals, yet Israel remained silent.
With Iran attacking Israel, there is a growing chance that the United States—Israel’s most significant military ally—will be pulled into direct conflict with Iran. On Saturday, the White House committed to backing Israel’s defense after dispatching more Navy ships to the region in preparation for an attack.
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