finance

European stock markets were all in negative territory on Monday morning after weak sentiment in Asian markets, where Japan’s benchmark Nikkei 225 index plunged more than 5% and Taiwan’s benchmark fell 4.4%.

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Other Asian markets also tumbled after oil prices soared to nearly $120 a barrel, casting a shadow over economies heavily dependent on imported crude and gas from the region.

In Europe, London’s FTSE 100 was down 1.6%, while Frankfurt’s DAX, Paris’s CAC 40 and Milan’s FTSE MIB were all down more than 2.4%, as of 09:30 CET. Madrid’s IBEX 35 fell nearly 2.7%, and the pan-European Stoxx 600 lost about 2%.

While rising oil and gas prices are threatening Europe’s economic outlook this year, trading sentiment was further impacted on Monday by worse-than-expected data from Germany.

German industrial production and factory orders both fell at the start of the year. Output decreased by 0.5% in January following a revised 1% decline the previous month, the statistics office said on Monday.

Meanwhile, investor expectations are rising that the European Central Bank could raise benchmark interest rates this year, as soaring energy prices fuel fears that inflation may surge.

The panic in the stock market unfolded as oil prices became the main focus for investors.

Oil prices soaring

Oil prices rocketed higher as both sides in the Iran conflict struck new targets over the weekend, including civilian infrastructure. The war, now in its second week, involves regions critical to the production and transport of oil and gas from the Persian Gulf.

Prices moderated after the Financial Times reported that some members of the Group of Seven (G7) were considering releasing strategic oil reserves to ease pressure on markets. The unconfirmed report cited unnamed sources familiar with the discussions.

Oil prices spiked near $120 per barrel before falling back on Monday as the conflict intensified, threatening production and shipping in the Middle East and rattling global financial markets.

The price for a barrel of Brent crude, the international benchmark, surged to $119.50 early in the day but later traded around $107.80.

West Texas Intermediate (WTI), the US benchmark, spiked to $119.48 per barrel but fell back to around $103 by the European market open.

Strikes on Iranian oil facilities risk increasing pressure on an already tight global energy market, analysts warned. Lindsay James, investment strategist at Quilter, said “Iran accounts for roughly 4% of global oil supply, and around 90% of its exports are directed to China.”

The world’s second-largest economy has vast reserves, but analysts say any prolonged damage to Iran’s export capacity could weigh on its economic recovery and eventually affect global markets.

James also warned that attacks on shipping and energy infrastructure in the Gulf risk escalating tensions and unsettling markets that had initially expected the conflict to be resolved quickly.

After disruptions in the Strait of Hormuz linked to the conflict, the European gas market is also under pressure. Natural gas futures jumped more than 14% on Monday to above €61 per megawatt-hour, nearing their highest level in three years and extending last week’s 67% surge.

Several major producers in the region have cut back output, and Qatar’s Ras Laffan facility — the world’s largest liquefied natural gas (LNG) plant — was shut down last week.

Russia has also warned it could halt natural gas exports to Europe, adding to market anxiety.

At the same time, Europe’s gas reserves remain low, with EU storage levels below 30% and requiring refilling.

Early Monday, the US dollar, which retains its status as a safe-haven asset, gained against other major currencies. It was trading at 158.46 Japanese yen, up from 158.09 late Friday. The euro rose slightly to $1.1558 from $1.1556.

In other trading, gold prices were down more than 1% on Monday morning in Europe, trading around $5,100, while cryptocurrencies were mostly higher. One bitcoin traded at $67,774, up 0.7%.

IMF: ‘Think of the unthinkable and prepare for it’

As fears grow over how long the war could last — and with Asian markets, often seen as engines of global growth, under heavy pressure — International Monetary Fund Managing Director Kristalina Georgieva warned that policymakers must prepare for the “unthinkable.”

“If the new conflict proves prolonged, it has clear and obvious potential to affect market sentiment, growth, and inflation, placing new demands on policymakers,” Georgieva said in a keynote speech at a symposium in Tokyo on Monday.

She reminded her audience that, as a rule of thumb, every 10% increase in oil prices — if sustained through most of the year — could raise global headline inflation by about 40 basis points and reduce global output by 0.1–0.2%.

“And if, as we all hope, the conflict ends soon, then be sure that, before long, some new shock will come. My advice to policymakers everywhere in this new global environment? Think of the unthinkable and prepare for it,” she added.

Generation Z is using social media to voice concerns about a potential U.S. recession, drawing attention to signs they believe are indicators of economic stress: from Lady Gaga’s newest album to 2000s-style low-rise jeans. Is this an exaggerated response to uncertainty, or is Gen Z tapped into early economic warning signs that might typically go unnoticed?

While it can be tempting to get sucked into these theories, ultimately, experts and data suggest that these are unreliable indicators and that a recession is not looming. Here’s what to know.

Insights from Gen Z on Economic Trends

Generation Z is interpreting the return of 2000s trends as indicators of an impending recession. The resurgence of fashion styles such as low-rise jeans, cheetah print, and rhinestone apparel parallels the cultural trends leading up to the 2008 Great Recession. In turn, Gen Z is concluding that these are warning signs of a similar time period, rather than turning to actual economic data and expert analysis.

Music is another way Gen Z is interpreting recession indicators. For instance, Lady Gaga’s latest album has led TikTok users to comment on how the country is heading toward economic turmoil due to the album’s similarity to her pre-recession era music. Newer artists, such as Chappell Roan, are also sparking commentary on the resemblance of 2000s-styled music, reinforcing this theory. 

Economic Data Analysis: Understanding the Trends

So, is there any merit to what Gen Z sees as cultural cues to a souring economy? Established economic indicators suggest no. Traditionally, economists look at gross domestic product (GDP), unemployment rates, and the stock market to gauge recession risk. Let’s break down where each of these stands.

GDP

Government data reports that GDP grew at an annual rate of 1.4% in the fourth quarter of 2025. Increases in consumer spending and investment contributed to the GDP increase. For a recession to start, there needs to be an increase in the unemployment rate and a decrease in GDP for two consecutive quarters.

J.P. Morgan anticipated a 0.25% annualized growth rate in GDP for the second half of 2025. Based on their data, they estimated that the probability of a recession has decreased from 60% to 40% due to a reduction in tariffs on China by the United States.

Unemployment Rates

Economists and policymakers use the Sahm rule to identify if there is a recession, as described by the U.S. Congress. The rule signals a recession if “the three-month moving average of the unemployment rate increases by 0.5 percentage points or more relative to its low in the previous 12 months.”

Unemployment rates are currently at 4.4%, according to the U.S. Bureau of Labor Statistics. For comparison, the unemployment rate before the 2008 recession was 5%. Thus, the rule has not been triggered, indicating that there is no recession, though it remains a useful early indicator of a potential recession.

Stock Market

The Dow was down 1% on March 6, 2026. This downturn, however, appears to reflect a weak jobs report and oil futures amid war rather than signal an impending recession. For reference, the Dow declined 7% on Sept. 29, 2008.

The Bottom Line

Gen Z’s recession indicators, such as music and fashion, may be persuasive, but their concerns do not reflect actual trends. While the pressures of federal layoffs and tariff tensions persist, most traditional indicators signal a moderately stable environment and do not suggest the country is in a recession. 

Ultimately, while Gen Z’s recession interpretations may not be reliable, they do highlight a cultural shift in how younger generations understand the economy, relying on cultural cues rather than traditional data.