US-Iran Military Strikes Trigger Global Stock Market Selloff

Global financial markets faced a broad selloff on July 8 and 9, 2026, following an exchange of military strikes between the United States and Iran. The conflict escalated after Iranian forces reportedly attacked commercial tankers in the Strait of Hormuz, prompting retaliatory strikes by U.S. forces. Donald Trump declared the ceasefire with Iran over, stated that the Memorandum of Understanding with Tehran was no longer valid, and characterized further engagement as "futile."

The geopolitical instability drove crude oil prices higher, with Brent crude rising above $79 a barrel. This surge triggered inflation concerns and risk aversion across major indices. India's BSE Sensex plummeted 2.15 percent, marking its sharpest single-day decline in four months, while Tokyo's Nikkei 225 fell 2.11 percent on July 8. European markets also declined, with Germany's DAX dropping 2.23 percent, and the Australian S&P/ASX 200 entered a four-session losing streak.

Market recovery was fragmented. On July 9, the Nikkei 225 surged 2.2 percent, led by technology gains, despite continued military exchanges. In the U.S., the Dow Jones suffered its worst single-day drop in over a month, while the Nasdaq saw modest gains as investors pivoted toward AI and semiconductor stocks. The Japanese yen hit a 38-year low against the dollar, prompting warnings from Finance Minister Shunichi Suzuki regarding currency volatility. Additionally, the U.S. government revoked a license allowing Iran to sell oil, further intensifying the economic pressure.