The ASX200 index experienced a significant downturn, plunging 2.9% at the market’s opening at 10 a.m. It continued its decline to reach a low of 4.3% throughout the session.

This sharp drop placed the market on course for a staggering $130 billion loss, a downturn not seen since the turbulent early days of the COVID-19 pandemic in 2020.

While some losses were recouped during later trading, the market closed with a substantial 2.85% decline, wiping approximately $90 billion from investors’ portfolios.

This marked the most challenging session since the announcement of “liberation day” tariffs by then-U.S. President Donald Trump in April of the previous year.

9News finance editor Chris Kohler commented on the situation, saying, “Calling this unusual is certainly an understatement.”

“Investors are primarily concerned about stagflation,” Kohler explained, “a condition characterized by high inflation coupled with low growth, often triggered by a significant external shock.”

The massive plunge comes on the back of rising oil prices, which have gone up 30 per cent, rocketing to $US110 per barrel.

It was the first time oil prices exceeded $US100 since the aftermath of Russia’s invasion of Ukraine in 2022.

Capital.com senior analyst Kyle Rodda warned market conditions could worsen the longer the war continues.

“It’s something that only happens once in a generation, perhaps even less,” he told 9News.

“This is why investors are so fearful about this escalation and the risk that this drags on, is because the longer that it does drag on, the worse things could potentially get.”

Before the effects of the global conflict could be felt, the market reached a record high last Monday. 

The price of oil had also trended lower over the past few years. 

“The reason that the market reacted so savagely today is because things had been going quite well,” Kohler said. 

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