Stock futures took a hit early Monday after the US and Israel launched strikes on Iran over the weekend, pushing oil prices higher and adding fresh instability in the Middle East to the growing list of worries for equity investors.
Feture tied to the Dow jones industrial average fell 375 point or 0.77%. S&p 500 future droppe 0.74% and Nasdaq 100 future decline 0.85%. Gold future gain 1.6% as investot rush toward safe haven assets.
the US strike on Iran, oil prices
The joint US-Israel strikes resulted in the death of Supreme Leader Ayatollah Ali Khamenei, a pivotal moment for the Islamic Republic and one of its most significant events since 1979. President Donald Trump told to Us military operation in Iran. But despite these comments investor remain wary of a drawn out conflict.
The large scale operation was laughed Saturday night after Iran reject Us demand to helt it’s nuclear program. Iran have a voved strong response raising concerns that the conflict concern cloud speard through the region.
The risk of a prolonged conflict is higher now than in 2024 or 2025. Although we don’t see this escalation to a point where it fundamentally shift the us approach. However it still to early buy any dips this weak. Especially since investor have grown used to immediate de escalation in past.
US crude prices surged 8% in early trading. As investors worried the confrontation could spiral into a broader war disrupting supply.
Iran is the fourth largest oil producer with in OPEC and uncertainty looms over who will ultimately govern the country aim a leader ship vacuum.
Oil market momentum may depend on whether the conflict disrupts traffic through the Strait of Hormuz, the world’s most critical chokepoint for crude oil flows. A sustained blockage there could send shockwaves through global energy markets and reignite inflationary pressures.
Wider uncertainty is weighing on investor sentiment which could broadly impact risk asset global. said Adam Hett global head of multi asset at Janus henreson. If uncertainty persist rising oil prices may spark global inflation fears.
This geopolitical escalation adds to what was already a fragile backdrop for stock. The s&p 500 sold off on friday. And closed February in the red aim fresh turbulence in artificial intelligence and software share as investor question whether rapid ai adoption might displace traditional ssofwaer provider.
Fears that automation could disrupt business models and trigger further layoffs have weighed on sentiment, raising concerns about spillover effects on the broader economy.
“All things considered, we expect a short-term impact, but we can’t rule out longer-term headwinds for equities,” Citi equity strategists told clients in a note on the fallout from Iran. “We now have to factor in this new wave of volatility amid an already growing list of concerns. That said, AI spending still appears poised to remain strong, but the productivity promise is increasingly facing disruption from AI-driven business model changes.
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