Stock futures are sharply lower to start the week as investors monitor developments in the widening Middle East conflict; President Donald Trump said that military operations in Iran are likely to last several more weeks; oil prices are surging amid concerns about supply disruptions, giving energy stocks a boost; gold and silver prices are rising as investors seek safe-haven assets amid the conflict; and U.S. defense contractor stocks are also gaining in early trading. Here’s what you need to know today.
Stock Futures Slide as Investors Monitor Middle East News
Stocks are sliding this morning as traders keep close tabs on the escalating conflict in the Middle East after the U.S. and Israel attacked Iran over the weekend. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down 1% recently, while those linked to the tech-heavy Nasdaq dropped 1.4%. The major indexes lost ground last week to wrap up a volatile month of trading fueled by AI-related concerns and economic uncertainty. Oil prices and gold prices surged in response to the news from the Middle East (more on those markets below). Bitcoin, which dropped as low as $63,000 early Saturday in the immediate aftermath of the strikes, was at $66,000 recently. The yield on the 10-year Treasury was at 3.99%, up from 3.96% at Friday’s close.
Trump Sees Military Operations in Iran Lasting Several Weeks
As the conflict between the U.S. and Iran entered its third day, President Donald Trump warned this weekend that the combat operations in Iran were likely to continue for several more weeks, The New York Times reported. This weekend’s bombing of Iran resulted in the killing of the country’s Supreme Leader, Ali Khamenei, and caused damage throughout the country. It sparked a wave of retaliatory strikes by Iran against Israel and U.S. interests in several countries across the region throughout the weekend. Oil giant Saudi Aramco reported that it shut down its largest oil refinery after an Iranian missile attack set that facility on fire, while other oil production sites in the region were put on hold amid the conflict. Meanwhile, flights were suspended across the region as Iran launched attacks on the United Arab Emirates cities of Dubai and Abu Dhabi.
Conflict Sends Oil Prices Higher; Energy Stocks Rise, Airlines Fall
Oil futures surged to their highest levels in more than a year this morning, sending energy stocks sharply higher and travel-related stocks lower. Brent crude futures, the international benchmark, were up 9% recently at $79.50, their highest level since January of last year. West Texas International futures, the U.S. benchmark, jumped more than 8% to $72.75 per barrel, the highest mark since last June. Oil prices are rising amid worries that Iran could strike at oil facilities in the region or interfere with oil shipping through the Strait of Hormuz, a key navigational point for oil tankers in the Persian Gulf. Rising costs related to rerouting and insuring shipments are also weighing on sentiment. Energy sector stocks are getting a boost from the surge in oil prices; shares of drilling firm Occidental (OXY) were up 7%, while oil majors ExxonMobil (XOM) and Chevron (CVX) also jumped. Airline stocks and others sensitive to fuel prices plunged this morning. Shares of American (AAL) and United (UAL) were each down more than 6%, while Royal Caribbean Cruises (RCL) dropped 7%.
Gold, Silver Futures Jump on Geopolitical Uncertainty
Precious metal prices are rising as investors seek safe havens amid the fresh geopolitical and economic uncertainty sparked by the conflict in the Middle East. Gold futures were up 3% at $5,400 an ounce, approaching the record high levels set in late January. Silver futures were up more than 2% at $95.40 an ounce. Precious metals like gold and silver are often used as a safe-haven asset for investors, serving as protection for portfolios during periods of geopolitical uncertainty.
Defense Stocks Rising as Conflict Enters Third Day
Shares in U.S. defense contractors are rising amid the armed conflict. Shares of RTX (RTX), formerly known as Raytheon Technologies, were up 5% recently, as were shares of aircraft maker Lockheed Martin (LMT) and those of B-2 bomber maker Northrop Grumman (NOC). Defense stocks have had a good start to the year. Through Friday’s close, Lockheed Martin shares had gained 36% since the start of the year, while Northrop Grumman shares were up 27% and RTX shares had risen more than 10% over the same period.
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