Global stock markets declined sharply Monday as tensions escalated in the Middle East, fueled by threats of retaliation from Iran following a U.S. Ultimatum regarding the Strait of Hormuz. The Prague Stock Exchange fell 2.8 percent, while the Frankfurt exchange dropped 2 percent, according to reports.
The volatility extended to other asset classes, with bond markets, the euro, and gold also experiencing declines. “The reaction overall corresponds to how markets have reacted to previous shocks related to the Iran war,” Tomáš Vlk, an analyst at Patria Finance, told Novinky.cz.
Oil prices surged at the start of the week as investors assessed the implications of a two-day ultimatum issued by U.S. President Donald Trump to Iran concerning the reopening of the Strait of Hormuz, alongside threats of retaliatory measures from Tehran. Vlk warned that further escalation, particularly attacks on civilian infrastructure such as energy facilities, data centers, and desalination plants, could lead to significant price increases for oil and gas, and potentially widespread regional chaos.
Despite the heightened tensions, Vlk suggested that Trump’s ultimatums are often a negotiating tactic. “He routinely issues ultimatums, and many ultimately result in delays or modifications to the threat. This could happen again. Markets are nervous, but it’s not a panic. Investors are also likely calculating that Trump will back down from the threat of even higher energy prices and the risk that allies in the Gulf will lose access to drinking water,” Vlk said.
Asian markets opened Monday with substantial losses, with most indices falling between 3 and 4 percent, and some experiencing even steeper declines. Bohumil Trampota, an analyst at Komerční banka, attributed the downturn to the instability in the Middle East and the resulting uncertainty surrounding energy commodities.
Iran’s military spokesperson responded to Trump’s ultimatum Sunday, stating that any U.S. Attack on Iranian fuel and energy infrastructure would be met with a forceful response targeting U.S. And allied energy, information technology, and desalination infrastructure in the region. The statement did not specify which “regime” would be targeted alongside the United States.
The Iranian Revolutionary Guard Corps subsequently warned that if the U.S. Attacks, Iran would completely close the Strait of Hormuz, destroy companies with American shares, and target energy facilities in countries hosting U.S. Bases. The Iranian defense council further threatened to mine the Persian Gulf and attack power plants throughout the Arab region in the event of a U.S. Ground invasion, according to Reuters.
As of Monday afternoon, the Prague Stock Exchange reported an overall trading volume of 670,271,067.40 CZK, with a market capitalization of 20,286,557,470,805.38 CZK. The largest gains were seen in RBI (+12.22%) and Photon Energy (+5.75%), while Fixed.Zone (-26.58%) and Atomtrace (-10.00%) experienced the most significant losses. The PSE is currently preparing for its Jarní Start Day on May 19-20, 2026.
Investors are now awaiting the opening of U.S. Markets for further indications of the global impact of the escalating situation.
