Global markets were jolted awake early Friday morning as U.S. stock futures took a sharp dive, with Dow futures plunging more than 600 points, following confirmed reports of Israeli airstrikes on Iranian military targets.
The geopolitical flare-up sent shockwaves through oil markets and triggered a swift flight to safety from risk assets.
The Dow Jones Industrial Average futures slid by roughly 1.4%, while S&P 500 and Nasdaq 100 futures each lost around 1.5% to 1.7%, signaling a grim open for Wall Street.
The sell-off came in tandem with a dramatic surge in crude oil prices — with Brent and WTI futures skyrocketing between 8% and 14%, reflecting concerns over possible supply disruptions from the oil-rich region.
“This is a classic risk-off event,” said Lara Jennings, Chief Global Strategist at Helix Markets.
“The combination of rising oil prices, potential military escalation, and uncertainty in the Strait of Hormuz is a toxic mix for investor sentiment.”
A Market on Edge
The market’s reaction mirrors the fragility of a global economy already grappling with inflationary pressures and interest rate uncertainties.
The Middle East has long been a flashpoint for energy markets, and any hint of conflict involving Iran typically fuels fears of supply chokepoints.
Energy stocks, unsurprisingly, were among the few poised to open higher, while airline, cruise, and consumer discretionary sectors appeared set to bear the brunt of the turmoil.
Defense stocks also saw pre-market gains as investors pivoted toward geopolitical hedges.
Safe Havens Surge
In parallel, gold surged past $2,400 per ounce, and U.S. Treasury yields dipped, signaling a massive move into safe-haven assets.
The U.S. dollar strengthened against most currencies, underlining investors’ desire for stability amid uncertainty.
“It’s not just the size of the drop that matters — it’s the cause,” explained Chris Randle, senior analyst at Stonebridge Financial.
“Markets can digest bad earnings or inflation data. But geopolitical escalation with a military dimension sends tremors through every asset class.”
Analysts warn that further escalation could send oil beyond $100 per barrel and inject volatility into central banks’ already complex policy outlooks.
For now, traders are bracing for a wild session — and possibly a turbulent few weeks — as the global community watches for Iran’s next move.
The White House has yet to release a formal response, but sources indicate diplomatic backchannels are active to prevent a broader regional conflict.
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