Dow Futures Drop as Oil Surges After U.S.-Israeli Bombardment of Iran
dow futures fell as investors moved to the sidelines Sunday evening, a risk-off reaction to U. S. -Israeli bombardment of Iran over the weekend and fresh comments from President Donald Trump about sanctions relief after the reported death of Supreme Leader Ali Khamenei.
Dow Futures slip as tensions with Iran spike
Futures tied to the Dow Jones industrial average lost 353 points, or 0. 72%, as S&P 500 futures fell 0. 68% and Nasdaq futures dropped 0. 79%. The move came Sunday evening as markets digested news that President Trump warned more casualties were likely from Operation Epic Fury and said on social media Saturday the bombing would continue "as long as necessary to achieve our objective of PEACE THROUGHOUT THE MIDDLE EAST AND, INDEED, THE WORLD!"
Oil prices surge; Brent and U. S. crude climb
U. S. oil futures jumped 5. 6% to $70. 77 a barrel, while Brent crude rose 5. 9% to $77. 15 after earlier spikes of more than 8%. In over-the-counter trading earlier on Sunday, Brent had jumped 10% to about $80 a barrel. The oil moves accompanied fears that Iran might disrupt flows through the Strait of Hormuz, which carries about a fifth of the world’s oil to export markets.
Shipping halted near the Strait of Hormuz
Shipping data compiled by showed hundreds of tankers carrying oil and liquid natural gas had dropped anchor or were stationary near the Strait of Hormuz after tanker owners, oil majors and trading houses suspended shipments the strait on Saturday. The Islamic Revolutionary Guards Corps warned ships passage was not allowed in the strait and said Sunday it struck three oil tankers with missiles. Greece’s shipping ministry advised vessels to avoid the Persian Gulf, the Gulf of Oman and the Strait of Hormuz, and Maersk said it is suspending all vessel crossings through the strait until further notice.
Where Dow Futures stood as other markets moved
Markets also reacted to the broader economic implications: Iran pumped 4. 7 million barrels per day last year, equal to 4. 4% of global oil supplies, raising concern that a closure of the strait would hit Asia hardest, where many economies rely on those lanes for imports, Idanna Appio, a portfolio manager and senior analyst covering sovereign debt and foreign exchanges, said. Gold rose 2. 3% to $5, 367 per ounce, and silver climbed, reflecting a flight to perceived safety.
Policy signals and the toll of conflict
Trump told on Sunday evening he would consider lifting sanctions on Iran if new leadership replacing Ali Khamenei, who was killed in an airstrike, could be a pragmatic partner. The selloff also came amid an FBI investigation into a mass shooting in Texas the previous night as a potential act of terrorism. Operation Epic Fury and the reported leadership changes have combined to tighten markets and raise political uncertainty.
