Escalation in the Middle East sends stock markets plummeting

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• The renewed military tensions between Israel and Iran have weighed on stock markets around the world.
• The Swiss benchmark index SMI lost around 0.7 percent on Monday morning, while other European markets also fell.
• Rising oil prices and new inflation concerns are increasing nervousness ahead of important interest rate decisions by central banks.

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The situation in the Middle East escalated again over the weekend, sending stock markets around the world into a dive. The Swiss SMI was unable to escape this trend. Developments in the Middle East over the weekend once again confirmed how fragile and unpredictable the situation there is, commented one trader.

Despite the agreed ceasefire, there were renewed military clashes between Israel and Iran over the weekend. This led to a renewed rise in oil prices. "This means that all fears of stubborn inflation are back in the market and investors now have to decide whether they would rather take some risk out of their portfolios before the summer break," explains one trader.

SMI with losses

The Swiss Market Index (SMI) lost 0.69 percent to 13,295.84 points at around 10.55 am. The losers (17) are clearly in the majority. The SMIM of mid-caps fell by 0.81 percent to 2969.41 points and the broad SPI by 0.83 percent to 18,768.92 points.

In Europe, the most important indices such as the German Dax and the French Cac-40 fell to a similar extent as the SMI. In Asia, the losses in the morning were much more pronounced in some cases. There, the sell-off in the US sub-sector last Friday in particular put many prices under pressure.

Tech stocks weak

This is also affecting technology stocks in Germany. Among the blue chips, Logitech fell by 0.9 percent. VAT, AMS Osram, Inficon and Comet followed with losses of up to 2.8 percent.

In addition to the financing issues, many traders are also pointing to SpaceX's upcoming IPO on Friday. Not only is it seen as a major test of sentiment for the sector. In order to be able to participate in this mega event, it is also quite possible that investors will withdraw their funds from other investments - above all the technology sector, which has previously been on fire.

But the SpaceX IPO is not the only landmark event this week. A new round of central bank meetings will also begin on Thursday with the European Central Bank. The US Fed and the Swiss National Bank will follow next week. In all cases, market participants will be paying particular attention to how the monetary authorities assess the further development of inflation, especially as there is no end in sight to the Middle East conflict.

Just how nervously investors react to bad news is also evident in Kardex at the start of the week. The shares plummeted by 13.5 percent after the warehouse logistics company announced that it expects a lower EBIT margin in 2026.