Global Markets Fall as US-Iran Tensions Rise, Oil Prices Jump

Global stock markets dropped on Thursday, February 20, 2026, as tensions between the US and Iran grew. Oil prices jumped higher than expected.
By Newsroom | Finance, Geopolitics |

Markets across the globe experienced a downturn, with significant impacts observed on stock exchanges and commodity prices. The primary driver appears to be heightened geopolitical tension between the United States and Iran. This situation has prompted caution among investors, leading to sell-offs and a general flight to safer assets.

Key events and market movements include:

  • Australian Securities Exchange (ASX): The ASX showed a notable decline, mirroring weakness seen in Wall Street.

  • US Stock Markets: Major US indices, including the Dow Jones and Nasdaq Composite, registered losses.

  • Oil Prices: Crude oil prices saw a substantial increase, directly correlating with the rising geopolitical concerns.

  • Currency Fluctuations: The Japanese yen strengthened, while the Australian dollar weakened against the US dollar.

  • Specific Company Performance: Certain companies, particularly in the software and financial sectors, experienced downward pressure.

Geopolitical Tensions Spark Global Market Volatility

The escalating tensions between the United States and Iran have become a central point of concern for global financial markets. Reports indicate a heightened risk of military confrontation, a prospect that has unsettled investors and triggered a predictable response in asset valuations.

  • Timeline: Developments suggesting an increased likelihood of conflict have occurred over the past several days, with fresh statements and actions influencing market sentiment.

  • Actors: The United States and Iran are the principal nations involved in this geopolitical standoff.

  • Events: Concerns have been amplified by statements regarding potential military action and retaliatory measures.

Evidence of Market Impact

  • US Markets: On Thursday, US stocks fell. The Dow Jones dropped by 267 points (0.5%), and the Nasdaq Composite slipped by 0.3%. The S&P 500 remained close to flat for the year as investors moved away from financial stocks.

  • Oil Price Surge: Crude oil prices extended their gains amid building geopolitical tensions. This rise is a direct reaction to fears of supply disruptions and increased conflict risk.

  • Australian Market Reaction: The ASX was set to open lower, tracking the weakness on Wall Street and the firmer oil prices. Some reports suggest the ASX fell to a three-week low due to fears of an Iran attack.

  • Currency Movements: The Japanese yen rose from 155.31 yen per US dollar to JPY154.53. The Australian dollar dipped from US70.78 cents to US70.26 cents.

  • Company Performance:

  • Apollo Global Management fell 5.2%.

  • Ares Management sank 3.1%.

  • Woodside Energy added 0.1%, while Santos slipped 0.6%.

  • BHP rose 1%, and Fortescue added 0.5%.

  • Gold miners climbed, with Northern Star up 0.5% and Evolution Mining up 2.3%.

  • Software stocks like Salesforce, Intuit, and Cadence Design Systems were weaker.

  • Broker Downgrades: UBS downgraded several resource stocks, including Fortescue, Pilbara Minerals, and Liontown Resources.

Investor Sentiment and Asset Reallocation

Investor sentiment has shifted towards caution. The rising geopolitical risk is prompting a reallocation of assets, with a noticeable movement out of some growth-oriented sectors and into more traditional safe havens.

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  • Risk-Off Environment: The prevailing atmosphere is one of risk aversion. This is evident in the performance of tech stocks, where investors are taking profits.

  • Safe Haven Demand: Gold miners have seen gains, suggesting a search for assets perceived as more secure during times of uncertainty.

  • Financial Sector Concerns: There are mentions of "private credit concerns" leading investors to rotate out of financial stocks in the US.

Impact on Commodities and Currencies

The geopolitical situation has had a pronounced effect on commodities, particularly oil, and has also influenced currency markets.

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  • Oil Market Dynamics:

  • Crude prices have risen significantly due to worries about potential military confrontation.

  • Is the continued rise in oil prices expected to contribute to upward pressure on inflation?

  • Currency Performance:

  • The Japanese yen has strengthened against the US dollar.

  • The Australian dollar has weakened. This currency is sometimes viewed as a proxy for global growth and risk appetite.

  • Could the dip in the Aussie dollar signal a broader decrease in global risk appetite?

  • Base Metals: Base metal prices have fallen.

Analysis of Sector-Specific Movements

Certain sectors have shown distinct reactions to the current market conditions.

  • Energy Sector: While not explicitly detailed as a strong performer across the board, oil price increases are a significant factor influencing the broader energy landscape. Woodside Energy saw a slight gain, while Santos experienced a minor drop.

  • Resource Stocks: Broker downgrades have weighed on resource stocks, impacting companies like Fortescue, Pilbara Minerals, and Liontown Resources.

  • Software and Technology: Software stocks remain under pressure, with Salesforce, Intuit, and Cadence Design Systems showing weakness. This suggests a re-evaluation of the impact of artificial intelligence on business models and potentially a broader sell-off in growth sectors.

  • Financials: In the US, investors are rotating out of financial stocks, with specific concerns noted around private credit. In Australia, the performance of major banks was mixed.

Upcoming Economic Data and Market Focus

Market participants are also awaiting key economic data releases that could further influence market direction.

  • Global PMIs: Attention is being paid to manufacturing and services Purchasing Managers' Index (PMI) releases globally.

  • US Economic Indicators: In the United States, data on Gross Domestic Product (GDP) growth, personal income and spending, the Personal Consumption Expenditures (PCE) inflation measure, and new home sales are due. The University of Michigan sentiment survey is also a focus.

Conclusion and Future Outlook

The present market environment is characterized by heightened volatility, largely driven by escalating geopolitical tensions between the United States and Iran. This has led to a general decline in equity markets, a surge in oil prices, and shifts in currency valuations. Investors are reacting with caution, leading to a reallocation of assets and a focus on upcoming economic data.

  • Immediate Impact: Equity markets, both in the US and Australia, have experienced declines.

  • Commodity Reaction: Oil prices have risen sharply due to geopolitical risks.

  • Investor Behavior: A move towards caution and away from growth-oriented sectors is observable.

  • Future Considerations: Upcoming economic data will play a crucial role in shaping market sentiment in the short term. The resolution or escalation of the US-Iran tensions will remain a primary concern for global markets.

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Frequently Asked Questions

Q: Why did global markets fall on Thursday, February 20, 2026?
Global markets fell because of rising tensions between the United States and Iran. This made investors worried about conflict and led them to sell stocks.
Q: How did the US-Iran tensions affect oil prices on February 20, 2026?
Oil prices jumped higher on Thursday, February 20, 2026, because of fears that conflict between the US and Iran could disrupt oil supplies.
Q: What happened to stock markets like the US Dow Jones and the Australian ASX on February 20, 2026?
The US stock market, including the Dow Jones which fell 267 points, and the Australian ASX both dropped on Thursday, February 20, 2026. This was a direct result of the increased geopolitical worries.
Q: Which currencies changed value on February 20, 2026, because of the tensions?
The Japanese yen got stronger against the US dollar, while the Australian dollar got weaker. This shows investors are moving away from riskier assets.
Q: What is the outlook for markets after the US-Iran tensions on February 20, 2026?
Markets are expected to stay shaky as long as the US-Iran tensions continue. Investors will also watch for new economic data this week to guide their decisions.