Middle East Conflict Resonates with Rate Hike Expectations: Global Assets in Turmoil, US Stocks Fall for Fourth Straight Day, Bond Market "Bloodbath," Gold Posts Largest Weekly Decline in 43 Years

March 21 – Escalating Middle East tensions combined with a sharp jump in expectations for Federal Reserve rate hikes have triggered a systemic shock to global markets. U.S. stocks posted their fourth straight week of losses, marking the longest weekly losing streak in a year. The Nasdaq tumbled more than 2% in a single session, with tech shares under heavy selling pressure. Global bond yields jumped sharply, pushing U.S., U.K., and German government bonds to multi-year peaks and sparking widespread deleveraging. Commodities saw sharp divergence: Gold dropped below the $4,500 level, plunging more than 10% in one week—the biggest weekly decline since 1983—raising questions about its safe-haven credentials. Meanwhile, crude oil surged on Middle East supply concerns: Brent crude topped $110 a barrel, and Dubai crude futures jumped over 16% in a single session. Bitcoin found support near the $70,000 level, outperforming gold for three straight weeks. Market analysts note that geopolitical tensions pushing up energy prices and stoking inflation expectations have prompted markets to reassess the monetary policy outlook. Global financial conditions are tightening rapidly, with risk assets continuing to reprice lower.