Israel Strikes Iran Nuclear Targets; Global Markets Roil Amid Escalation Fears

A sharp escalation in West Asia tensions unfolded early Friday as Israel launched coordinated airstrikes on multiple sites across Iran, targeting what it described as facilities linked to Tehran’s nuclear weapons program. The pre-dawn attack, marks a significant expansion in hostilities in the region, drawing swift geopolitical and market reactions.

According to the IDF, dozens of Israeli Air Force jets struck military and nuclear-linked sites, claiming it was the first phase of a broader operation aimed at neutralising what Israel calls an "existential threat." 

Israeli Prime Minister Benjamin Netanyahu announced that Israel had launched Operation Rising Lion, a targeted military campaign aimed at neutralising what he called an existential threat from Iran. He said the operation would continue as long as necessary to eliminate the danger. Defence Minister Israel Katz declared a state of emergency, cautioning that a retaliatory strike from Iran, possibly involving missiles or drones, was expected soon.

Iranian state media reported casualties in Tehran, with videos circulating online showing explosions and anti-aircraft activity in the capital. While unverified, the visuals point to strikes on infrastructure.

The US did not take part in the strikes, though it was reportedly briefed in advance. Secretary of State Marco Rubio said that Israel had informed Washington of its intention and stressed that the US priority was the safety of its forces in the region. President Donald Trump had earlier remarked that progress on nuclear talks with Tehran had stalled, saying he was “less confident now” of a diplomatic resolution.

In response to the escalation, financial markets registered immediate volatility. Oil prices surged over 7%, with West Texas Intermediate climbing $5.22 to $73.26 per barrel and Brent rising $5.01 to $74.23 per barrel, amid fears of supply disruptions from the oil-rich region.

Equity markets reacted negatively. Japan’s Nikkei 225 dropped 1.2%, and US stock futures slid sharply, which Dow futures falling 1.6%, and S&P 500 and Nasdaq 100 futures falling 1.7% and 1.8%, respectively. India’s SGX GIFT Nifty slipped 0.75% in early trade. The rupee weakened, with offshore dollar/rupee trading around 86.06, compared to Thursday’s close of 85.60.