International News 05 March 2026
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Goldman Sachs CEO Says Markets Underestimating Iran Conflict Impact
Global financial markets may not yet fully reflect the risks stemming from the Middle East conflict involving Iran, according to David Solomon, CEO of Goldman Sachs. Speaking at a business forum in Sydney, Solomon said investors could need up to two weeks to fully digest the short- and medium-term implications of the war. He expressed surprise at the relatively calm market reaction, noting that geopolitical shocks typically trigger sharper sell-offs only when they directly disrupt economic growth. So far, he said, the cumulative impact of global uncertainties has not been fully priced into financial assets. Although oil prices have surged on supply concerns, inflation worries have resurfaced, global equities have softened, and the U.S. dollar has strengthened as investors rotate into safe-haven assets, the S&P 500 has declined less than 1% over the past week after trimming earlier losses. Solomon also emphasized the resilience of the United States economy, supported by monetary easing and regulatory relaxation, which could lead to stronger-than-expected growth this year albeit with slightly higher inflation risks. He noted that private credit portfolios remain relatively solid but warned that prolonged credit cycles can weaken lending standards as competition for capital intensifies—risks that typically surface when economic growth slows or enters recession. Beyond geopolitics and macroeconomics, Solomon highlighted the transformative impact of artificial intelligence on white-collar jobs in the near term. Goldman Sachs recently partnered with Anthropic to develop AI-based agents to automate internal processes, with Solomon stressing that the firm’s focus is on productivity gains and workforce reallocation rather than outright headcount reductions.
Indian Rupee Hits Record Low as Middle East Conflict Fuels Oil Surge and Dollar Strength
The Indian rupee plunged to an all-time low on Wednesday, falling to 92.0550 per U.S. dollar and surpassing its previous record of 91.9875 set in late January, as escalating conflict in the Middle East rattled global markets. The widening war involving the United States, Israel, and Iran has driven oil prices toward the US$85 per barrel level, strengthened the U.S. dollar, and triggered broad sell-offs in risk assets. As a major energy importer, India faces mounting pressure from rising crude prices, heightening concerns over inflation and macroeconomic stability. The rupee has now weakened more than 2% year-to-date in 2026, making it one of the worst-performing emerging market currencies amid heightened geopolitical risk sensitivity. Earlier optimism following a trade agreement between India and the United States— which had briefly supported foreign inflows—has quickly faded as tensions intensified. Analysts warn that pressure on the rupee could persist as long as the conflict remains unresolved and oil prices stay elevated, posing continued challenges for India’s external balance and currency stability.
Middle East Conflict Disrupts Global Aviation, Strands Thousands and Pressures Airline Stocks
Rising geopolitical tensions between the United States, Israel, and Iran have triggered one of the largest aviation disruptions since the COVID-19 pandemic, with more than 21,300 flights canceled across major Gulf hubs including Dubai International Airport, Hamad International Airport, and Zayed International Airport, according to Flightradar24. The closures and airspace restrictions have stranded tens of thousands of travelers and severely narrowed key long-haul corridors between Europe and Asia, complicating global airline operations. Governments have launched emergency repatriation flights, with the United Arab Emirates operating special air corridors and the U.S. arranging military and charter evacuations. Major Gulf carriers including Emirates, flydubai, and Etihad Airways have resumed limited services primarily to return stranded passengers. Airlines worldwide are also grappling with surging oil prices—up roughly 30% year-to-date—raising concerns over jet fuel costs and profitability. Delta Air Lines suspended its New York–Tel Aviv route until March 22, while demand for alternative routes such as Hong Kong–London has surged. Airline stocks fell globally, with declines seen in Lufthansa, Air France-KLM, Japan Airlines, and Korean Air. Analysts highlight varying impacts depending on fuel hedging strategies and cargo exposure, as many passenger airlines also carry freight. While some carriers such as Ryanair and Qantas Airways report adequate hedging protection, prolonged conflict could cost the Middle East billions in tourism revenue and weigh further on the global aviation sector.