Jared Blikre
markets

Stock market today: Dow, S&P 500, Nasdaq futures sink as oil prices rise as Iran attacks markets

by admin

US futures fell on Monday as oil prices rose after US and Israeli military strikes on Iran were followed by attacks, sending shockwaves through global markets.

Dow Jones Industrial Average futures (YM=F) fell 1.2%, or more than 500 points. S&P 500 (ES=F) contracts sank 1.1%, while those on the tech-heavy Nasdaq 100 (NQ=F) sank 1.4% as the escalating conflict in the Middle East prompted a flight from riskier assets.

The impact of oil prices, and inflation, is front of mind for investors who have long been uneasy about the stock market’s upside. The S&P 500 (^GSPC) closed February in negative territory after renewed uncertainty in AI and software names moved markets.

Oil prices rose on Monday, with Brent crude futures (BZ=F) rising as much as 13% to above $82 a barrel but modest gains slipped below $80 at the close. West Texas Intermediate futures (CL=F) traded below $73, up 8%. While Iran is OPEC’s fourth-largest producer, the market is also looking for a strong impact in the key Strait of Hormuz, where tanker traffic has come to a standstill.

Shares in energy giant Exxon (XOM) were out in the premarket. while defense stocks including Lockheed Martin (LMT) also gained buyers. But travel-related stocks fell, with Delta Air Lines ( DAL ) sliding nearly 6% in the fall.

Elsewhere in the markets, gold (GC=F) jumped above $5,400 an ounce, even as the dollar (DX-Y.NYB) rose, as JPMorgan said it expected to earn a “risk premium” of about 10 percent for the precious metal. Treasury yields (^TNX) rose as markets eased bets on interest rate cuts on expectations of higher inflation.

The next key input into those readings comes Friday, with the release of the monthly jobs report. Economists expect US payrolls to have added 60,000 jobs in February, since January’s stronger-than-expected gains eased fears of a recession.

LIVE 18 updates

  • Crude oil, gold, dollar jump as stocks set to open red

    The dollar (DX-Y.NYB) and gold futures (GC=F) are both bearish as we await the opening bell for stocks – a reminder that cash and bullion can rally together as investors seek safe havens.

    Apart from gold (and silver to some extent), crude oil is also increasing. WTI (CL=F) is tearing apart the apparent fear of risk-linked to geopolitics, and is pulling energy stocks higher even as many sectors are set to open in the red.

    The twist: long-term US Treasurys yields (^TNX, ^TYX) are rising as bonds are being dumped, not bought. That’s how investors want extra yield for long-term risk (called a term premium) – as well as a structured plan to reduce long-term (temporary) exposure as volatility increases.

    Geopolitical shocks often fade quickly in markets, but some are slower. Look at the Cboe Volatility Index (^VIX) above 20 as a gauge of real estate hedging needs (read: skittishness).

  • Nvidia invests $4 billion in Coherent, Lumentum to develop next-gen AI data center

    Nvidia ( NVDA ) said it has struck two partnerships with photonics companies Coherent ( COHR ) and Lumentum ( LITE ) on Monday in an effort to improve and secure access to state-of-the-art optics technology for next-generation AI data centers.

    Nvidia stock fell 1.2% in premarket trading following the announcement, while Coherent shares jumped 8% and Lumentum stock also gained more than 7%.

    Nvidia has agreed to invest $2 billion in Coherent to support the company’s future operations as it expands its US manufacturing capabilities. As part of the deal, Nvidia made a multi-billion dollar purchase agreement and received the rights to acquire advanced laser and optical networking products in the future.

    The Santa Clara-based company also announced a similar partnership with Lumentum, also investing $200 million to support research and development and a new fabric based in the US.

    Nvidia is rapidly ramping up its network business and is betting that the small graphics industry can help it make a large-scale AI network more powerful, reducing the bottleneck to the growth of artificial intelligence.

    “Computing has changed dramatically,” Nvidia CEO Jensen Huang said in a statement. “In the age of AI, software runs intelligently with signals generated in real time by AI factories for every interaction and every situation. With Coherent, NVIDIA is pioneering next-generation silicon photonics to enable AI infrastructure at unprecedented scale, speed and efficiency.”

  • Morgan Stanley’s Wilson says Iran should not erase the outlook

    From Bloomberg:

    Morgan Stanley strategists see the outbreak of violence in Iran and the Middle East as unlikely to affect their outlook for sales in the United States, avoiding a sharp and sustained increase in oil prices.

    Geopolitical risk events in history have not caused volatility in US prices, the team led by Mike Wilson wrote in a letter, referring to the average performance of the S&P 500 (^GSPC) index in the months following such sessions.

    In terms of the Iran conflict, the bear case comes from the strong and persistent rise in oil prices, which could affect what planners see as a strengthening business cycle, experts said.

    “Unless oil prices rise significantly and remain elevated, recent events are unlikely to change our outlook for the US economy over the next 6-12 months,” they wrote.

    Read more here.

  • Jenny McCall

    Premarket cruise lines: Norwegian Cruise Line, Berkshire, and American Airlines

    Norwegian Cruise Line Holdings Ltd.NCLH) the stock fell 7% before the bell on Monday. The cruise line released its fourth earnings report, and despite beating analysts’ estimates, the group’s shares fell as investors worried that rising fuel prices are driving up fuel prices. Royal Caribbean (RCL) shares also fell 5% during premarket hours today.

    Berkshire Hathaway’s (BRK-B) The stock fell 1% during premarket hours following its quarterly earnings release on Saturday. Berkshire’s operating profit after taxes fell 30% from last year.

    American Airlines’ (AAL) stocks fell 5% before the bell on Monday, as rising oil prices fueled concerns among traders that fuel costs will rise.

  • Jenny McCall

    Gold rises above $5,400 as demand for a safe haven jumps amid Iran tensions

    Gold futures (GC=F) rose on Monday, trading above $5,400 an hour as tensions in the Middle East prompted investors to move to safe havens.

    Ines Ferré of Yahoo Finance reports:

    Read more here.

  • Treasurys retreat as inflation worries end buying

    The 10-year Treasury yield is rising along with those of US bonds significantly, even as the ongoing US-Iran conflict raises risk conditions in the markets.

    From Bloomberg:

    Read more here.

  • Jenny McCall

    The dollar rallies as an increase in oil prices reduces bets on Fed rate cuts

    The dollar (DX=F) rose against other currencies as higher oil prices led economists to believe that the Federal Reserve will not cut rates any time soon.

    Bloomberg News says:

    Read more here.

  • Jenny McCall

    Tesla gains market share in France, Norway in February

    Tesla (TSLA) regained market share in France and Norway in February, according to government data, in a sign of stability in Europe after two years of declining sales. Tesla stock fell 2% before the bell on Monday.

    Reuters says:

    Read more here.

  • Jenny McCall

    Security measures jump, planes slide as Iran attack jolts markets

    Airline, hotel, and defense stocks all rose on Monday as investors began to react to the Iran conflict. Lockheed Martin (LMT) shares rose 7% before the bell on Monday, alongside RTX (RTX). BAE Systems’ ( BA.L ) London shares rose 5%.

    Energy companies also saw their stocks jump, with New Fortress Energy (NFE) shares rising 15% in premarket trading. Oil major Equinor ASA (EQNR) rose 4%.

    Bloomberg News says:

    Read more here.

  • Brian Sozzi

    Gold prices hovered around the pre-Middle East wars

    Gold (GC=F) prices are holding a strong bid this morning to above $5,400 an ounce.

    A useful chart from JPMorgan shows how gold prices have fared against the backdrop of the Middle East conflict:

  • Brian Sozzi

    JPMorgan is weighing on the risk facing oil prices

    The JPMorgan team sees higher oil (CL=F, BZ=F) prices up to $120 a barrel if the war spreads across the Middle East:

  • Brian Sozzi

    The first Yahoo Finance moves tracks following the US attack on Iran

    Not surprisingly, some of the most visited ticker pages on Yahoo Finance this morning include Exxon Mobil (XOM), Lockheed Martin (LMT), Chevron (CVX) and Occidental Petroleum (OXY).

    You can check the full list of names here.

    Some useful charts from EvercoreISI are showing major oil.

  • Brian Sozzi

    Where Goldman sees oil prices directly

    Oil (CL = F, BZ = F) prices rose this morning after the launch of the US attack on Iran.

    Goldman thinks that a good upside can be left on prices:

  • Brian Sozzi

    Goldman Sachs on the markets amid Operation Epic Fury

    How Goldman is thinking about the markets after the attack on the US and Iran:

  • Jenny McCall

    Trump pushes for change in Iran’s leadership as Tehran remains defiant

    President Trump said on Sunday that the bombing of Iran would continue for several weeks and called on Tehran’s leaders to surrender. But Iran’s security chief said he had no intention of negotiating with the US.

    Bombings continued in Bahrain, Kuwait, the United Arab Emirates, and Qatar, as the Gulf states seized missiles launched by Iran in retaliation for the US-Israeli strike, showing that the war is spreading beyond Iran’s borders. The conflict has entered its third day since US-Israeli forces launched airstrikes against Iran over the weekend.

    Trump is calling on Iran’s leaders to hand over power to the nation’s people, and The Atlantic said Trump has agreed to talk to Iran’s new leadership.

    Bloomberg News says:

    Read more here.

  • Bitcoin falls below $67,000 in fallout from Middle East attacks

    Ines Ferré of Yahoo Finance reports:

    Read more here.

  • Gold rises as Middle East unrest pushes investors to safer assets

    Bloomberg says:

    Read more here.

  • Oil prices rise sharply as the attack on Iran shakes global markets

    Jake Conley of Yahoo Finance reports:

    Read more here.

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