On April 1, 2026, US President Donald Trump delivered a televised address regarding the ongoing conflict in Iran, stating that 'overwhelming victories on the battlefield' had been achieved and warning of further strikes against Iran over the next two to three weeks if no deal is reached [1][2][3][4][5][6]. Trump specifically threatened to bring Iran 'back to the Stone Age' and indicated that Iranian energy infrastructure could be targeted, which heightened concerns about Middle Eastern energy supply stability [1][2][4][5].
The immediate market reaction was pronounced: crude oil futures jumped, with West Texas Intermediate (WTI) prices rallying close to the $100 mark during the Asian session and gaining nearly 5% after two days of losses, trading around $98.90 per barrel at the time of writing [1][2][6]. Technical analysis from multiple sources highlighted resistance at $100.80 and $102.70, with a break above these levels potentially opening the way toward $105.00, while failure to sustain above $102–103 could shift bias toward bearish traders and drag prices to $98.50 or lower [2]. Asian equity markets responded negatively, with Japan and Korea indices falling by 3%, as investors worried about the duration of the conflict and its impact on global supply chains and energy prices [1].
The US Dollar Index (DXY) advanced to near 100.00, supported by safe-haven flows and expectations that higher energy prices could prompt the US Federal Reserve to keep interest rates steady or even raise them, with futures markets pricing in a 52% probability of a Fed rate increase by the end of 2026 [3][4][5][6]. The EUR/USD pair declined below 1.1550, with the US Dollar strengthening against all major currencies, including the Canadian Dollar, which depreciated as USD/CAD rebounded to around 1.3900 [4][6]. However, the upside for USD/CAD may be restrained by higher oil prices, given Canada's status as the largest crude exporter to the US [6].
Gold (XAU/USD) retreated sharply from a two-week high of $4,800, falling around $150 from its Asian session peak, as the US Dollar's strength and rising Treasury yields weighed on the non-yielding asset [5]. Technical analysis indicated fading upside momentum for both gold and oil, with volatility expected to remain elevated as investors react to ongoing geopolitical headlines [2][5]. Market participants advised caution, maintaining tight stop-losses and reducing exposure to risk assets until greater clarity emerges regarding the conflict's trajectory and its impact on global energy flows [1][5].
Forward-looking statements from analysts and Fed officials suggest that US monetary policy is likely to remain unchanged for some time, with St. Louis Fed President Alberto Musalem noting that current policy is appropriately positioned [6]. All eyes are now on the upcoming US employment report for March, with consensus estimates for Nonfarm Payrolls at 60,000 and the unemployment rate projected to hold at 4.4%. Weaker-than-expected outcomes could weigh on the US Dollar, but for now, geopolitical risk and energy market volatility dominate market sentiment [3][5].
CONCLUSION
President Trump's Iran war speech has triggered a surge in oil prices, a sharp selloff in Asian equities, and a rally in the US Dollar, with markets pricing in higher geopolitical risk and inflationary pressures. Technical and fundamental signals point to continued volatility across commodities and currencies, with investors advised to remain cautious until there is greater clarity on the conflict and its impact on global energy flows. The immediate market takeaway is heightened uncertainty and risk aversion, with safe-haven assets and energy prices in focus.