Abstract：On Saturday, the United States joined Israel’s war against Iran after attacking three key Iranian nuclear sites.
Stock futures rose slightly on Monday after the United States entered Israel's war against Iran over the weekend by striking three nuclear sites, a move by President Donald Trump that initially raised oil prices and risked a bigger conflict in the Middle East.
Futures tied to the Dow Jones Industrial Average rose by 49 points, or 0.1%. S&P 500 futures added 0.3% and Nasdaq-100 futures moved up 0.4%.
The U.S. launched attacks Saturday at Iranian sites in Fordo, Isfahan and Natanz, surprising investors who were expecting more diplomacy to possibly take place after Trump said on Friday that he would make a decision to attack Iran “within the next two weeks,” according to the White House.
Oil prices had already spiked in recent weeks following the increased tensions in the Middle East. U.S. crude oil futures on Sunday night reached highs not seen since January before paring those gains. WTI was last 0.4% higher at $74.15 per barrel.
“When you have conflict, you have an overreaction — a knee jerk reaction — which tends to be an exaggeration, that can last up to two to three weeks,” said Jay Woods, chief global strategist at Freedom Capital Markets. “With Ukraine, the S&P 500 sold off 6% and oil spiked dramatically.”
Trump said in a Saturday evening speech from the White House after the attacks, that “there will be either peace, or there will be tragedy for Iran far greater than we have witnessed over the last eight days.”
Now traders braced for Iran's retaliation. The country could target U.S. personnel in nearby bases or close the Strait of Hormuz, which would majorly disrupt global oil flows. A prolonged blocking of the strait could boost oil prices above $100 per barrel. In a Sunday interview, with Fox News, U.S. Secretary of State Marco Rubio called for the Chinese government to step in and prevent Iran from closing the key trade route. China remains Iran's most important oil customer.
“Now with the U.S. fully engaged in the conflict, the baseline for oil prices has shifted to the mid $80s range per barrel entering stage two from one-side regional conflict to U.S. managed conflict,” said Ahmad Assiri of Pepperstone. “Even if Iran doesn't physically close the strait or attack oil tanks, the mere increase in probability from about 5% to around 15% will itself create a premium in crude prices.”
The S&P 500 lost 0.15% last week for its second negative week in a row. Despite this soft patch, the benchmark closed Friday about 3% from a record. The spike in oil prices and a greater war in the Middle East adds another threat to the stock market and the economy, already dealing with a rushed remaking of global trade by Trump this year.
Defense stocks rise in premarket trade after U.S. strikes on Iran
Defense names nudged higher in premarket trade as global investors monitor the fallout from U.S. air strikes on Iranian nuclear targets.
Northrop Grumman was up 2.07% at 4:26 a.m. ET, with Lockheed Martin up 1.13%, RTX Corp up 1.4%, Palantir up 1.3% and L3Harris Technologies up 1.4%.
Asia-Pacific markets mostly decline as U.S. bombing of Iran escalates Middle East crisis
Asia-Pacific markets mostly declined Monday, after the United States' attack on three nuclear sites in Iran raised oil prices and investors' fears of an escalation in the Middle East conflict.
Oil prices fell in late Asian hours, reversing course from gains earlier in the day.
Brent Crude was trading at $76.75 per barrel after falling 0.32% as of 4.23 p.m. Singapore time, while the West Texas Intermediate crude lost 0.33% to $73.6.
Japan's benchmark Nikkei 225 ended the day 0.13% lower at 38,354.09, while the broader Topix index moved down 0.36% to 2,761.18.
In South Korea, the Kospi index retreated 0.24% to close at 3,014.47, while the small-cap Kosdaq lost 0.85% to 784.79.
Hong Kong's Hang Seng Index moved up 0.67% to end the day at 23,689.13, while mainland China's CSI 300 index added 0.29% to 3,857.90.
Over in Australia, the S&P/ASX 200 ended the day 0.36% lower at 8,474.9.
India's benchmark Nifty 50 dropped 0.33%, while the BSE Sensex fell 0.44% as at 1.40 p.m. Indian Standard Time.
Oil prices jump after Iran strikes raise fears of supply disruption
Helima Croft, RBC Capital Markets global head of commodity strategy, joins CNBC's “Special Report” to discuss the latest moves in the oil and energy markets following Washington's surprise attack against Iranian nuclear sites.
Where the major averages stand for the month
Here's where the major averages stand for the month ahead of Monday's new week of trading:
- The S&P 500 is up 0.95%
- The Nasdaq Composite is up 1.75%
- The Dow Jones Industrial Average is down 0.15%
- The Russell 2000 is up 2.08%
The S&P 500 was the only major index to suffer losses last week
The S&P 500 was the only of the three major averages that ended last week lower.
- The benchmark fell 0.15%, marking its second negative week in a row for the first time since a two-week losing streak that ended on April 4.
- The Dow Jones Industrial Average rose 0.02% on the week, managing to claim its third positive week in four.
- The Nasdaq Composite added 0.21% for the week, also notching its third positive week out of four.
- The Russell 2000 gained 0.42% on the week, also marking its third positive week out of four.
Bitcoin sinks below $99,000 as Iran attack triggers crypto market sell-off
Bitcoin dropped below the $99,000 mark on Sunday — its lowest point in more than a month — as the crypto market became the first to react to escalating geopolitical risk.
Bitcoin was trading around $99,380, down more than 2% over the past 24 hours, while ether had dropped 5% to below $2,200. Solana, XRP, and dogecoin also posted sharp losses, dragging the entire crypto complex deep into the red.
More than $1.04 billion flowed into spot bitcoin ETFs from Monday through Wednesday last week, according to data from CoinGlass. But those inflows collapsed heading into the weekend, with zero net movement Thursday and just $6.4 million on Friday — coinciding with President Donald Trump'searly G7 departure and the announcement of a two-week review of U.S. options on Iran.
The technical breakdown added fuel to the selloff. At its peak on Sunday, more than $1 billion in crypto positions were liquidated during a 24-hour span — with over 95% coming from long bets, underscoring just how overexposed the market was heading into the weekend.
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Gulf markets end higher despite turmoil in wake of U.S. strikes on Iran
Markets across the Middle East ended mostly higher on Sunday after the United States entered the war between Israel and Iran.
Stocks in Tel Aviv reached an all-time high on bets Washington's entrance into the conflict with Tehran would help it to come to an end. The broader TA-125 index was 1.77% higher, while the TA-35, Tel Aviv's blue-chip index, was up 1.5%.
Egypt's benchmark EGX30 was the region's major gainer, up 2.7%.
“The Gulf has distanced itself and has been calling for appeasement, supporting a peaceful resolution, and has gone as far as condemning Israeli aggression,” Fadi Arbid, founding partner and CIO of Amwal Capital Partners, told CNBC. He explained that such rhetoric “has helped the Gulf isolate itself from conflict” and any significant short-term market impact, adding that the net mid-term is positive.
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Stock futures tumble on Sunday night
Stock futures tumbled shortly after 6 p.m. ET on Sunday night.
Dow futures shed 309 points, or 0.7%. S&P 500 futures fell 0.8%, while Nasdaq 100 futures lost 1%.
