Stock Market Today: Futures Fall as Oil Nears $80 After Strikes on Iran

U. S. stock futures tumbled Monday while oil prices jumped after military strikes by the U. S. and Israel on Iran were followed by counterattacks, jolting markets and lifting energy and defense stocks ahead of a key jobs report later this week. The moves stoked concern about possible disruptions to oil shipments through the Strait of Hormuz.

Futures slide as investors pull back from risk

Dow Jones Industrial Average futures slumped 1. 2%, a drop the context described as more than 500 points, while contracts on the S&P 500 sank 1. 1% in premarket trading. Nasdaq futures also fell as investors retreated from risk assets amid the widening conflict in the Middle East.

Travel-related names bore the early brunt of the sell-off: Delta Air Lines slid nearly 6% in premarket activity, Norwegian Cruise Line Holdings fell 7%, and Royal Caribbean declined about 5%. By contrast, energy and defense names drew buying interest, with shares of Exxon rising in the premarket and defense contractors including Lockheed Martin finding buyers.

Oil and shipping disruptions push prices higher

Oil prices jumped sharply on the news. Brent crude moved toward the $80-a-barrel area after a steep intraday gain, and West Texas Intermediate traded just below $73, roughly an 8% rise at one point in another account. Analysts flagged the Strait of Hormuz as a critical risk: Eurasia Group analysts wrote in a March 1 research note that oil and gas tanker traffic through the Strait of Hormuz had ground to a near halt, with firms and traders putting voyages on hold for fear of targeting in the maritime choke point.

The prospect of higher oil costs fed worries about inflation and corporate fuel bills, squeezing airline and cruise operators in premarket trading. A separate note in the markets saw gold futures climb above $5, 400 per ounce while the dollar rose and Treasury yields moved higher as investors scaled back bets on near-term interest-rate cuts.

Winners, losers and the economic backdrop

Market reactions were mixed by sector: energy shares rallied as crude rose, defense stocks attracted flows, and travel and leisure names weakened on the prospect of higher fuel and operating costs. Berkshire Hathaway shares fell about 1% in premarket trading following the release of its fourth-quarter earnings, which showed a drop in operating profit after taxes from the prior year. American Airlines slid roughly 5% before the bell amid the oil-price concerns.