Drivers
Trump's remarks were the immediate trigger for the market reaction; referencing the Islamabad Memorandum, he said: "I think it's over. I don't want to deal with them anymore. They're scum, they're sick people, they're led by sick people, and they're vicious, violent people." In response, Mohammad Bagher Ghalibaf, Iran's parliament speaker and one of its senior negotiators, wrote on X: "The era of bullying and extortion is over... We don't fold." The regional reaction was swift: Qatar's foreign ministry condemned the strikes on Kuwait and Bahrain and stressed the need to spare the region "the consequences of unjustified attacks," while the US, Bahrain, Jordan, Kuwait, Qatar, Saudi Arabia, and the UAE issued a joint statement condemning the attacks. Domestically, pressure on the free-market dollar is not new: the narrowing of Iran's dollar oil-sales license has weakened one of the country's few fresh sources of foreign-currency income, intensifying precautionary dollar buying in the free market. A less-covered layer of the story is Iran's leadership: Supreme Leader Ali Khamenei was killed during this same war in Esfand 1404 (February 28, 2026), and his son, Mojtaba Khamenei, was elected to succeed him by the Assembly of Experts later that month (March 9, 2026); international media reported that the vote came amid pressure from Revolutionary Guard commanders on Assembly members. Uncertainty over how unified Tehran's decision-making currently is has become one of the risks international analysts are flagging.