Dow Futures slide as oil, gold surge amid U.S.-Iran escalation
dow futures fell as traders moved to a risk-off stance Sunday evening after a U. S. -Israeli bombardment of Iran over the weekend and fresh political signals from President Donald Trump. The market reaction pushed oil and gold sharply higher and highlighted shipping disruptions near the Strait of Hormuz.
Dow Futures slide 353 points as broader futures weaken
Futures tied to the Dow Jones industrial average fell 353 points, or 0. 72%, while S&P 500 futures were down 0. 68% and Nasdaq futures lost 0. 79%. U. S. stock futures pointed to a risk-off trade Sunday evening as investors reacted to the U. S. -Israeli bombardment of Iran over the weekend. President Donald Trump warned more casualties are likely from Operation Epic Fury and has said earlier that the bombing will continue “as long as necessary to achieve our objective of PEACE THROUGHOUT THE MIDDLE EAST AND, INDEED, THE WORLD!”
The FBI is investigating a mass shooting last night in Texas as potential terrorism, a development that fed into the broader market caution. Trump also said on Sunday evening that he is open to lifting sanctions on Iran if the new leadership that replaces Supreme Leader Ali Khamenei, who was killed in an airstrike, can serve as a pragmatic partner.
Oil futures spike: U. S. crude, Brent and over-the-counter moves
U. S. oil futures jumped 5. 6% to $70. 77 a barrel, and Brent crude gained 5. 9% to $77. 15 after earlier spikes of more than 8%. In over-the-counter trading earlier on Sunday, Brent prices rose about 10% to roughly $80 a barrel. The moves in energy benchmarks were a primary driver of market volatility as traders reassessed supply risk tied to the conflict.
Iran pumped 4. 7 million barrels per day last year, accounting for 4. 4% of global oil supplies, intensifying concerns about any disruption to that output. Analysts have estimated that Iranian moves to close the Strait of Hormuz could send prices to $100 per barrel.
Shipping and tanker disruptions cluster near the Strait of Hormuz
The Islamic Revolutionary Guards Corps warned ships that passage is not allowed in the strait and said Sunday that it struck three oil tankers with missiles. Fear of attacks froze ship traffic even before those strikes: hundreds of tankers carrying oil and liquid natural gas had already dropped anchor or were stationary near the Strait of Hormuz.
Tanker owners, oil majors and trading houses suspended shipments the strait on Saturday as a precaution. Greece’s shipping ministry advised vessels to avoid the Persian Gulf, the Gulf of Oman and the Strait of Hormuz, and the shipping firm Maersk suspended all vessel crossings through the strait until further notice.
Regional dependence and supply risk: Asia, Idanna Appio and potential price upside
Closure of the strait would hit Asia the hardest, because most economies in the region are major oil importers whose supply routes depend on those lanes being open, said Idanna Appio, a portfolio manager and senior analyst covering sovereign debt and foreign exchanges. That regional vulnerability helped push oil and related markets higher as the conflict widened.
