Markets responded with surprising calm to the assassination of Iran's top military leaders, despite the potential for significant geopolitical disruption. Brent crude rose modestly, marking only the 38th-largest jump since 1980, while US stocks remained essentially flat. The relative market stability reflects confidence that oil supplies won't face the severe disruptions seen in the 1970s.

Safe-haven assets delivered mixed signals. Gold and Treasury bonds both declined, puzzling investors seeking shelter from the Middle East conflict. The dollar strengthened significantly, gaining nearly 1% and breaking above its 200-day moving average for only the third time since last year's tariff announcements. This dollar rally suggests growing concerns about inflation risks rather than pure geopolitical flight to safety.

Emerging markets bore the brunt of investor anxiety, with the FTSE emerging markets index dropping 2% in its worst performance since last April's tariff fallout. Higher oil prices create a double-edged sword for developing economies - benefiting exporters like Brazil and Colombia while pressuring importers like Mexico and Chile. Despite the immediate selloff, analysts note that emerging markets still trade at substantial discounts to developed markets, with strong earnings growth and improving fiscal positions providing underlying support.