US Strikes on Iran Send Global Equities Lower After Record-High Session — Deutsche Bank

The Quick Take

• Global equity markets reversed from record highs after new US strikes and sanctions on Iran, per Deutsche Bank's Jim Reid.
• The reversal interrupted a session where US indices had set intraday record levels driven by risk-on sentiment.
• Geopolitical shock events historically inject risk premium across equities and safe-haven demand into gold, bonds, and yen.

Global equity markets staged a sharp intraday reversal from record-high levels after fresh US military strikes and sanctions targeting Iran introduced geopolitical risk premium into an otherwise risk-on session. Deutsche Bank's Jim Reid flagged the event as a meaningful shock to market momentum, noting that the reversal came precisely when indices had been celebrating new record territory.

Geopolitical shocks of this type historically generate a predictable capital flow pattern: equity risk premium expands, oil prices spike on supply-disruption risk, safe-haven assets (gold, US Treasuries, JPY) attract defensive rotation, and high-yield credit spreads widen. The duration of the equity selloff depends critically on whether the Iran engagement escalates or remains contained — a distinction the market will attempt to price within 24-48 hours.

Key events to watch include any Iranian counter-response that would escalate into regional energy infrastructure risk, particularly any threat to Strait of Hormuz shipping. The macro variable is oil supply continuity: a meaningful supply disruption would amplify inflationary pressure on central bank policy and structurally reset equity multiples downward.

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