European Stocks Dragged into Risk-Off Mode as US-Iran Conflict Heats Up
European stocks fell sharply on Tuesday (March 3), reflecting a rapid shift to risk-off mode as escalating conflict in the Middle East weighed on global sentiment. Early in the session, Germany's DAX index fell 1.9%, France's CAC 40 fell 1.2%, and the UK's FTSE 100 fell 1%, as investors cut exposure to riskier assets.
Market pressure was fueled by concerns about the spread of the US-Iran conflict, which began last weekend, to the Gulf region. Reports indicated that the US Embassy in Riyadh was targeted in a missile attack, while several digital infrastructure assets—including Amazon data centers in the UAE and Bahrain—were affected in a series of Iranian retaliatory attacks in several Middle Eastern countries.
These developments raise doubts about the status of Gulf cities like Dubai as "safe" destinations for regional business and capital flows, especially as the risk of attacks on strategic facilities and critical infrastructure increases. At the same time, Israel reported simultaneous operations targeting Iran and Lebanon after Hezbollah—a Tehran-backed group—attacked Tel Aviv with missiles and drones.
Washington tightened security measures by ordering the evacuation of non-essential US government personnel and their family members from Bahrain, Iraq, and Jordan. US President Donald Trump stated that the US would do “whatever it takes” to achieve its military objectives—a signal that the operation could last weeks, keeping geopolitical risk premiums high and potentially depressing global equities for an extended period. (alg)
Source: Newsmaker.id
