Stock market today: Dow, S&P 500, Nasdaq futures slump while oil prices jump as Iran attacks jolt markets
Why it matters: The escalating conflict threatens to ignite inflation, derail interest rate cut hopes, and fundamentally shift investment strategies towards safe havens and defense, while punishing sectors vulnerable to higher energy costs.
- Dow, S&P 500, and Nasdaq futures slumped over 1% as investors fled risk assets following the Iran attacks, with the S&P 500 already in negative territory for February.
- Oil prices jumped significantly, with Brent crude surging 13% and West Texas Intermediate up 8%, driven by Iran's role as a major OPEC producer and fears of sustained disruption in the Strait of Hormuz.
- Energy stocks like Exxon and defense stocks including Lockheed Martin found buyers, while travel-linked stocks such as Delta Air Lines, Norwegian Cruise Line, and American Airlines plunged due to rising fuel cost concerns.
- Gold surged above $5,400 an ounce, with JPMorgan anticipating a 10% 'risk premium' gain, as Treasury yields moved higher amid reduced bets on interest-rate cuts due to inflation prospects.
- Berkshire Hathaway's stock fell after reporting a 30% drop in operating profit, adding to market jitters.
- Upcoming economic data, including Friday's jobs report, and key earnings from Broadcom, Marvell Technology, Target, and Costco, will provide further insight into inflation and AI trade trends.
Global markets are reeling from escalating Middle East tensions, with US stock futures plummeting and oil prices surging after US and Israeli strikes on Iran were met with counterattacks. This geopolitical shock intensifies inflation concerns, prompting investors to retreat from risk assets and re-evaluate interest rate cut expectations.
