Markets entered the week of March 23 already stretched. Oil was elevated, equities were under pressure, and the geopolitical risk premium embedded in asset prices was at levels not seen since 2020. Then, on Tuesday March 24, Houthi spokesman Yahya Sare’e announced that Ansar Allah — the Houthi movement — was formally declaring military participation in what it termed “the axis of resistance’s response to American-Zionist aggression.” Within hours, two ballistic missiles were in the air toward Saudi Arabia. By Wednesday, Red Sea shipping attacks had resumed at the highest intensity since early 2025.

Every market moved simultaneously. This is what the full week looked like.

Oil Markets: Brent $112, WTI Crosses $100

Brent crude, which had been trading in the $105–$109 range through mid-March, exploded through resistance levels on Houthi entry news. By Thursday March 26, Brent had closed at $112.40 per barrel — a level not seen since the post-Ukraine invasion spike of 2022 and, more significantly, a level that most oil market models had projected as a tail risk rather than a base case scenario.

WTI (West Texas Intermediate), the US benchmark, crossed the psychologically important $100 per barrel threshold on Wednesday for the first time since August 2022. The WTI/Brent spread — normally $3–$5 — compressed to approximately $12, reflecting the relative insulation of US landlocked production from Hormuz and Red Sea disruptions. US shale producers with Wyoming, Permian, and Bakken production are printing cash.

The drivers are now multiple and self-reinforcing: Hormuz remains disrupted (reducing Gulf crude export capacity by an estimated 40%), Houthi entry effectively closes the Red Sea to non-protected traffic (reducing the alternative routing for non-Hormuz Gulf crude through the Bab el-Mandeb strait), and OPEC+ has provided no indication it will release emergency supply above its pre-agreed April production schedule. The Hormuz disruption analysis explains the infrastructure constraints limiting supply alternatives.

What the models say for next week: Goldman’s commodity desk has a short-term Brent forecast of $110–$120 assuming no escalation beyond current intensity. JPMorgan has published a tail risk scenario of $130+ if Saudi oil infrastructure is materially damaged by Houthi attacks. The spread between base case and tail risk is unusually wide — a reflection of genuine market uncertainty rather than standard price risk.

US Equities: S&P 500 Worst Month Since March 2020

The S&P 500 closed Friday March 27 at approximately 4,680 — down 6.8% for the month of March, on pace for its worst monthly performance since the pandemic shock of March 2020. The index is now down approximately 12% from its February 2026 all-time high of 5,320.

The sector breakdown tells the war’s story clearly:

Energy (XLE): +14% in March — the only major sector in positive territory. Exxon, Chevron, ConocoPhillips, and Pioneer Natural Resources are all up substantially. US shale producers with WTI above $100 are generating free cash flows that most analysts had not modeled for 2026.

Defense (ITA): +9% in March — Lockheed Martin, RTX, Northrop Grumman, and General Dynamics all up. The munitions replenishment trade is real and the order visibility is improving with each supplemental budget request.

Technology (XLK): -11% in March — the highest-duration sector in the market is being crushed by the combination of rising long-term interest rates (as war spending expectations push Treasury yields higher) and valuation compression as risk appetite retreats. Nvidia, Microsoft, and Apple have all declined significantly.

Consumer Discretionary (XLY): -13% in March — the consumer is being squeezed by $4+ gasoline and the psychological weight of sustained geopolitical uncertainty. Retail and auto names are particularly weak.

Financials (XLF): -8% in March — banks face the dual pressure of Dubai bond exposure and rising credit loss provisions as consumer stress becomes visible in delinquency data.

The week’s equity market was also shaped by the formal rejection of the US peace proposal by Iran on Thursday. Markets had been pricing approximately 20–25% probability of a ceasefire agreement before the April 6 deadline. That probability, per options market implied volatility, dropped to below 10% following Tehran’s statement. Middle East ETF positioning guidance remains relevant for investors seeking regional exposure management.

Gold: $4,430 — A New All-Time High

Gold reached $4,430 per troy ounce on Friday, its 11th all-time high since the conflict began escalating in late February. The metal has now gained approximately 18% since February 24, adding roughly $670 per ounce from the pre-escalation level of approximately $3,760.

The gold rally has multiple support pillars. Safe-haven demand is the obvious driver — investors fleeing equity and credit risk are allocating to gold as the canonical conflict hedge. Less discussed but equally important: central bank buying from Gulf sovereign wealth funds and Asian central banks has accelerated. The UAE and Qatar have both been net gold buyers in recent weeks, reversing the selling behavior reported in mid-March. Saudi Arabia appears to have paused its gold sales. The Gulf gold selling analysis provides context for why the reversal matters.

Real interest rates — the primary fundamental driver of gold prices — remain supportive despite the rise in nominal Treasury yields. With US CPI running above 4% (energy-driven) and 10-year Treasury yields at approximately 4.6%, real yields remain near zero. Gold’s traditional inverse relationship with real yields continues to hold.

For gold mining equities: Newmont (NEM), Barrick Gold (GOLD), and Agnico Eagle (AEM) have all outperformed the physical metal in March, with leverage to gold price working in their favor at these price levels. Producer margins at $4,430 gold are extraordinary by any historical standard.

Dubai Real Estate and Bond Markets: Entering Distressed Territory

Dubai’s financial markets had been the region’s relative bright spot in the first weeks of the conflict — the emirate’s diversified, non-oil economy and its positioning as a neutral business hub had initially attracted capital fleeing more directly exposed markets. That resilience broke down this week.

Dubai government-linked bond spreads — specifically debt from Dubai World-successor entities and Emaar Properties — widened to 650+ basis points over comparable US Treasuries, entering the zone that distressed debt investors define as impaired. The immediate catalyst was reporting that Dubai has requested an IMF Article IV consultation, which markets interpreted as a precursor to potential support discussions.

The underlying stress is structural: Dubai’s economy is heavily dependent on tourism, luxury real estate, and regional business hub functions — all of which are materially impaired by the conflict. Hotel occupancy has fallen sharply. Luxury property transaction volumes dropped approximately 35% week-on-week in the most recent data. International airline connectivity from Dubai has been reduced as carriers reroute away from Persian Gulf airspace. The Dubai bond and real estate stress analysis from mid-March anticipated this deterioration.

Abu Dhabi, by contrast, is holding up better. ADIA and Mubadala remain liquid and are reportedly deploying capital opportunistically into distressed Dubai assets. The intra-emirate divergence — Abu Dhabi as oil-funded creditor, Dubai as liquidity-stressed debtor — is becoming a visible fault line in UAE markets. Abu Dhabi sovereign fund positioning is critical context for understanding which parts of UAE credit are safe harbor and which are exposed.

Geopolitics: The April 6 Deadline and Iran’s Rejection

The week’s most market-moving geopolitical developments were two: the Houthi entry (covered above) and Iran’s formal rejection of the US-mediated deal framework on Thursday March 26.

The proposed framework, mediated through Omani back-channels, had reportedly included: a 90-day ceasefire, a freeze on Iranian nuclear enrichment above 20%, a partial Hormuz reopening with US naval escort for commercial traffic, and a commitment to sanctions relief negotiations. Iran’s Supreme Leader statement on Thursday rejected all three substantive elements — the enrichment freeze, the Hormuz arrangement, and the implication that the negotiations constituted acceptance of US military pressure.

The Trump administration responded within hours, confirming the April 6 deadline stands and that the administration has prepared “a significant escalation package” for deployment if the deadline passes without Iranian acceptance of a revised framework. What escalation means specifically — additional air strikes, naval blockade tightening, targeting of Iranian financial infrastructure — was not disclosed.

Markets are now pricing the April 6 deadline as the dominant near-term binary event. Options expiring April 7 are showing implied volatility levels equivalent to major economic data releases. The asymmetry of outcomes — diplomatic breakthrough driving a sharp risk-on reversal, versus escalation extending the current bearish trajectory — makes directional positioning extremely difficult. Most institutional desks appear to be running reduced gross exposure rather than taking strong directional views.

The Week Ahead: What to Watch

The calendar for the week of March 30 – April 5 is dominated by geopolitical rather than economic events, but there are several scheduled market movers worth tracking:

April 1: US EIA weekly petroleum inventory report — elevated strategic petroleum reserve usage will be a market signal. Any SPR drawdown announcement above 1 million b/d would be oil-bearish in the short term.

April 3: US jobs report (March non-farm payrolls) — the first major labor data showing war-period economic conditions. Consensus is around 120,000 new jobs (down from 200,000+ pre-conflict), with energy sector gains partially offsetting service sector softness.

April 5: OPEC+ meeting — the alliance’s production decision is the most watched energy market event of the week. See our full April outlook for the OPEC+ scenario analysis.

April 6: Trump Iran deadline — the most significant geopolitical event in the calendar. No economic data release comes close in terms of potential market impact. Prepare for either a sharp risk-on (ceasefire signal) or risk-off (escalation announcement) market open on April 7.