Escalating US-Iran tensions may weigh on American stocks — Reuters

As reported by Reuters, financial markets could face a sharp sell-off if tensions between the US and Iran escalate. Such a scenario would further strain the already fragile global economy, pressured by Donald Trump's import tariffs.

Major US stock indexes are hovering near record highs, but investors are being cautious amid fears that fresh geopolitical turmoil could trigger a market downturn. According to Chuck Carlson of Horizon Investment Services, US intervention in the Middle East conflict would likely cause a short-term drop in American stocks. However, if events unfold rapidly, markets could stabilize quickly.

Geopolitical tensions have pushed US Treasury yields lower, while the dollar, despite a slight dip on Wednesday, has reinforced its status as a safe haven. Peter Cardillo of Spartan Capital Securities believes Trump will likely try to avoid being drawn into the conflict. Still, the analyst warns that if Washington gets dragged in, Treasury yields would fall further, and the dollar would rise.