Middle East conflict boosts global risk aversion sentiment, with safe-haven assets such as U.S. Treasuries, gold, and Swiss franc strengthening. Wall Street institutions adopt risk-averse strategies, and financial markets enter a highly sensitive period. The energy market is a focal point, with the Strait of Hormuz shipping traffic being a key variable. Brent crude oil hits a new high since July.

Short-term yields on U.S. Treasuries fall to their lowest levels since 2022, with institutions expecting yields to decline another 5-10 basis points; Bitcoin rebounds to around $68,000, as market demand for hedging downside risks remains strong. The S&P 500 index weakens, and institutions warn against blindly bottom-fishing, as the negative market reaction may be short-term.

In the short term, the market is likely to present a pattern of rising oil prices, falling U.S. Treasury yields, gold prices rising, and a slight correction in the stock market. Emerging markets face selling pressure due to rising oil import costs. Sector-wise, defensive sectors such as energy and defense are favored, while sectors like airlines and retail are under pressure.

Institutions believe that the geopolitical conflict will trigger short-term adjustments rather than a bear market. Once the situation clarifies, the market is expected to stabilize; high oil prices may exacerbate stagflation and increase the difficulty of Federal Reserve policies. It is recommended to allocate to gold and strategic key industries to enhance portfolio resilience.