Global markets brace for another volatile open as Middle East hostilities enter their second week. The Brent crude oil price surged 30% last week to above $90 a barrel, its biggest jump in six years, as the UAE, Kuwait, and Iraq reduced production amid storage constraints and tanker avoidance of the Strait of Hormuz.

Investors are grappling with energy disruptions that extend beyond the Strait of Hormuz, according to Roundhill Financial CEO Dave Mazza. The conflict has pushed the Cboe Volatility Index toward 30, while the RPAR Risk Parity ETF slipped almost 4%, its worst return in over three years. US bonds posted their worst performance since last year's tariff-driven rout.

President Trump's escalation threats via social media have amplified market jitters, with investors demanding higher premiums for investment-grade bonds over Treasuries. Hedge funds have slashed net exposure to levels unseen since 2022. Despite the turmoil, some analysts caution against excessive bearishness, noting the Trump administration's sensitivity to market swings and potential for diplomatic de-escalation.