US stock futures tumbled on Monday while oil prices surged, after military strikes by the US and Israel on Iran jolted global markets.
Dow Jones Industrial Average futures (YM=F) sank 1%, or over 500 points. Contracts on the S&P 500 (ES=F) also lost 1%, while those on the tech-heavy Nasdaq 100 (NQ=F) dived 1.4% as the escalating Middle East conflict spurred a retreat from risk assets.
The impact on oil prices, and in turn on inflation, is front of mind for investors already uneasy about the backdrop for stocks. The S&P 500 (^GSPC) closed February in negative territory as renewed volatility in AI and software names rattled markets.
Oil prices jumped, with Brent crude futures (BZ=F) surging 13% to top $82 a barrel but moderating gains to around 10% at last check. West Texas Intermediate futures (CL=F) traded just above $73, up around 9%. While Iran is OPEC’s fourth-largest producer, markets are also bracing for sustained disruption in the key Strait of Hormuz, where tanker traffic is at a standstill.
Elsewhere in markets, gold (GC=F) jumped to top $5,400 an ounce, even as the dollar (DX-Y.NYB) rose. Treasury yields (^TNX) across the board moved higher as markets cut back bets on interest-rate cuts on the prospect of hotter inflation.
The next key input into those rate calculations comes Friday, with the release of the monthy jobs report. Economists expect the US to have added 60,000 jobs in February, down from January’s stronger-than-expected 130,000 gain that eased recession fears.
Also ahead, earnings season highlights this week are chipmaker Broadcom’s (AVGO) report on Wednesday, followed by Marvell Technology (MRVL) on Thursday, for insight into the AI trade. Economy watchers will scrutinize retailers’ results, led by Target (TGT) and Costco (COST).
LIVE 14 updates
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Gold surges above $5,400 as demand for safe-haven asset jumps amid Iran conflict
Gold futures (GC=F) rose on Monday, trading above $5,400 per ounce as the ongoing conflict in the Middle East caused investors to move toward safe-haven assets.
Yahoo Finance’s Ines Ferré reports:
Read more here.
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Treasurys retreat as inflation concern eclipses haven buying
From Bloomberg:
US Treasuries fell as conflict in the Middle East sent oil prices soaring, stoking fear inflation will accelerate and forcing traders to scale back wagers on the scope of interest-rate cuts.
Rather than sheltering in US government debt as typically happens in times of global market turbulence, bond traders focused instead on the danger that fighting across the region reignites inflation — potentially dimming the chances of more Federal Reserve easing. US President Donald Trump, who is pushing for regime change in Iran, has said the bombing campaign could continue for weeks.
Read more here.
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Dollar rallies as oil’s surge curbs bets on Fed rate cuts
The dollar (DX=F) rose against other currencies as high oil prices made investors think the Federal Reserve won’t cut rates soon.
Bloomberg News reports:
Read more here.
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Tesla gains market share in France, Norway in February
Tesla (TSLA) gained market share again in France and Norway in February, according to official data. A sign of stabilization in Europe after two years of declining sales. Tesla stock fell 2% before the bell on Monday.
Reuters reports:
Read more here.
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Defense stocks jump, airlines slide as Iran attack jolts markets
The markets have started to react to the US-Israeli conflict with Iran, with airline, hotel and defence stocks all rising as global equities opened again this week. US defense stocks, Lockheed Martin (LMT), rose 7% before the bell on Monday, alongside RTX (RTX). BAE Systems’ (BA.L) London shares were up 5%.
Energy companies also saw their stocks jump, with New Fortress Energy’s (NFE) shares rising 15% during premarket hours, and oil major Equinor ASA (EQNR) rose 4%.
Bloomberg News reports:
Read more here.
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Gold prices around prior Middle East wars
Gold prices catching a strong bid this morning to over $5,400 an ounce.
Helpful chart from JP Morgan showing how gold prices have reacted around prior Middle East conflicts:
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JP Morgan weighs in on upside risk to oil prices
The JP Morgan team sees upside potential to oil prices to $120 a barrel if the war spreads throughout the Middle East:
“The main risk in our view remains that the regime could lose command and control over the IRGC—as highlighted by the recent attack in Oman—which would introduce a far more unpredictable and destabilizing scenario for regional oil supply and markets. Retaliation from Hezbollah could further amplify these risks. A prolonged escalation—especially if Iran applies economic pressure—could push prices much higher. We estimate that if the conflict lasts more than three weeks, GCC oil producers would exhaust storage capacity and would be forced to shut in production. Under this scenario, Brent could trade in the $100-$120 range. Given the timeline of these unknowns, we are not making changes to our existing price forecast at this stage.”
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Early Yahoo Finance trending tickers following US attacks on Iran
No surprise here, some of the most visited ticker pages on Yahoo Finance this morning include Exxon Mobil (XOM), Lockheed Martin (LMT), Chevron (CVX) and Occidental Petroleum (OXY).
You can check out the full list of names here.
Some helpful charts from EvercoreISI on the exposures for the oil majors.
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Where Goldman Sees oil prices headed
Oil prices have surged this morning post the launch of the US attacks on Iran.
Goldman thinks a good deal of upside may be left for prices:
“Based on the 15% weekend gain in retail prices, we estimate an $18/bbl real-time risk premium in crude oil prices, which corresponds approximately to our estimate of the fair value effect of a six-week full halt in Strait of Hormuz flows (allowing for spare pipeline capacity use as a partial offset). This estimated impact moderates to +$4 if only 50% of the flows are halted for one month. However, oil prices can rise substantially more if the market demands a premium for the risk of more persistent supply disruptions.”
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Goldman Sachs on the markets amidst Operation Epic Fury
How the Goldman is thinking about the markets in the wake of the US attacks against Iran:
“For equities and credit the impact is negative, but only a severe and sustained oil disruption would imply substantial consequences for global growth. We expect cyclical sectors and oil importers—some of which have had strong starts to the year and may face vulnerability from positioning adjustments—will likely see pressure unless a resolution occurs quickly.”
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Trump pushes for Iran leadership change as Tehran stays defiant
President Trump said on Sunday that the bombing against Iran will continue for several weeks and called for Tehran’s leaders to surrender. However, Iran’s security chief said it has no intention of negotiating with the US.
Blasts continued across Bahrain, Kuwait, the United Arab Emirates, and Qatar, as the Gulf states intercepted missiles launched by Iran in retaliation for the US-Israeli strikes, showing the war is spreading beyond Iran’s borders.
Trump is calling on Iran’s leaders to hand power to the nation’s people, and according to a report in the Atlantic, Trump has agreed to speak with Iran’s new leadership.
The conflict has entered its third day since US-Israeli forces began airstrikes against Iran over the weekend. The intense missile fire indicates that Tehran is not ready to negotiate, even as the country’s supreme leader and top military officials have been killed.
Bloomberg News reports:
Read more here.
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Bitcoin falls beneath $67,000 in fallout from Middle East attacks
Yahoo Finance’s Ines Ferré reports:
Read more here.
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Gold rises as Middle East instability pushes investors to safe-haven assets
Bloomberg reports:
Read more here.
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Oil prices leap higher as attacks on Iran shake global markets
Yahoo Finance’s Jake Conley reports:
Read more here.
