view original
post
US stock futures sold off again on Tuesday morning after Israel and US jets launched new strikes on Iran, as the widening conflict stoked worries about full-on regional war.
Contracts on the S&P 500 (ES=F) dived 1.5%, while those on the Dow Jones Industrial Average (YM=F) also pulled back 1.5%. Nasdaq 100 (NQ=F) futures led the retreat, dropping 1.9%, as oil prices continued to rally on concerns about blocked supply.
The fresh wave of Israeli-led attacks has jolted markets that on Monday mostly managed to shake off the initial shock of the outbreak of US-Iran hostilities. The major US gauges staged a comeback from steep intraday losses to mostly close higher, as dip-buyers stepped in.
Tuesday’s air strikes on Iran and Lebanon intensify a conflict that Wall Street expects to pressure global markets. The focus is now on Tehran’s response after Iran targeted oil infrastructure and other targets across a huge swathe of the region, with at least nine countries reporting hits.
Crude prices (BZ=F, CL=F) continued to rise on concerns that hostilities could disrupt key supply routes and reignite inflation pressures. According to Reuters, the Strait of Hormuz had been closed, with threats made against vessels attempting to pass through the waterway.
The conflict entered its third day Monday following joint US-Israeli strikes that killed Iran’s Supreme Leader, Ayatollah Ali Khamenei. President Trump indicated the war could last four to five weeks, though he acknowledged it could extend longer, with strong potential for economic knock-on effects to spread in the US and beyond.
Investors are also watching corporate earnings. Retail will see the largest slew of results, with Target (TGT) scheduled to report Tuesday, while later in the week reports are expected from wholesale retailer Costco (COST).
LIVE 4 updates
-
Oil rally builds as ‘staggering’ Middle East War Jolts Energy
Crude oil futures (BZ=F, CL=F) continued to rise on Tuesday as fresh Mideast strikes spurred concerns that hostilities could disrupt key supply routes and reignite inflation pressures.
Bloomberg reports:
Oil extended gains as the US and Israel stepped up their war against Iran, while Tehran vowed a full closure of the Strait of Hormuz and hit the American embassy in Riyadh with drones.
Global benchmark Brent rose above $80 a barrel, after spiking about 7% on Monday, while West Texas Intermediate was near $73. President Donald Trump said the US would do “whatever it takes,” and Secretary of State Marco Rubio told reporters the military campaign was set to intensify.
… Global energy markets have been upended by the war, which erupted on Saturday and then spread across the oil-rich Middle East as Iran sought to retaliate against Israel and states hosting US forces. Oil prices have spiked, along with natural gas and petroleum products such as diesel, potentially fueling a wave of inflation across the world. Coal has also jumped.
“With the Strait of Hormuz still inactive, the clock is ticking,” JPMorgan Chase & Co. analysts including Natasha Kaneva said in a note, flagging scope for some Persian Gulf producers to cut output within weeks if storage fills.
Read more here.
-
Korean stocks suffer worst sell-off since 2024 on Iran war risks
Bloomberg reports:
South Korean stocks slumped as Middle East tensions stoked concern over the impact of rising energy costs, with global funds offloading more than $3 billion of local equities amid a wave of risk-off sentiment.
The benchmark Kospi (^KS11) sank 7.2% in its worst session since August 2024, as the market reopened after a holiday. Chip heavyweights Samsung Electronics Co. (005930.KS) and SK Hynix Inc. (000660.KS) dragged the gauge lower, dropping at least 9.9% each.
A prolonged war could be a major test of the world-beating rally in Korean equities, with the Kospi still up 37% this year. Samsung and SK Hynix powered much of the gains on the back of surging global memory amid the artificial intelligence boom. Tuesday’s drop shaved around $170 billion in combined market cap from the duo, unnerving investors who had jumped into the rally betting the gains will extend.
“An extended conflict involving Iran risks keeping crude prices elevated, reinforcing upside inflation risks and complicating the Federal Reserve’s path toward policy easing,” said Jung In Yun, chief executive officer at Fibonacci Asset Management Global.
“That macro backdrop is weighing on AI-linked equities, where stretched valuations are increasingly sensitive to shifts in rates and liquidity expectations.”
Read more here.
-
Gold rises for fifth-straight day as investors move to risk-off assets
Bloomberg reports:
Read more here.
-
Sam Altman announces amendments over OpenAI deal with Pentagon
Reuters reports:
Read more here.
