The US dollar surged as global markets opened Sunday evening, with investors fleeing to safety amid escalating conflict in the Middle East. The Swiss franc gained against major peers while risk-sensitive currencies like the Australian dollar and South African rand fell sharply. Saudi Arabia and Egypt's benchmark equity indexes each slid more than 2% in early trading.

Markets already fragile from AI anxieties and credit concerns now face potential oil supply disruptions through the Strait of Hormuz, where about one-fifth of global oil flows pass daily. Brent crude closed at $72.48 a barrel Friday, with Bloomberg Economics estimating prices could spike to $108 if the critical waterway closes. Oil tanker traffic through Hormuz has nearly halted, and three ships were attacked near the Persian Gulf.

Energy and defense stocks are poised to rally when US equity trading begins, with Saudi Aramco shares climbing 3.4% Sunday. However, Barclays warns against buying any sudden dip in equities, with analysts suggesting a 10% pullback in the S&P 500 might present a better entry point. The conflict creates a complex dynamic for Treasury yields, caught between safe-haven demand and inflation concerns from potential oil price spikes toward $80-$90.