Stock futures dip, oil jumps after US attacks on Iranian nuclear sites
It’s a modest risk-off start to the week after the US strikes on Saturday evening.
US equity futures are lower while oil rips higher after American forces struck what President Donald Trump called three Iranian nuclear sites on Saturday evening.
West Texas Intermediate futures hit their highest level since January in early trading, with Brent briefly breaching the $80 per barrel threshold for the first time since the first month of 2025.
Bitcoin, which was trading around $104,000 when stocks closed on Friday, also fell below $100,000 in the aftermath of the attacks.
Geopolitical events often have a fleeting effect on markets, particularly for places far away from the epicenter of the kinetic action. However, warfare that spurs a material and persistent rise in oil prices can have significant and wide-ranging negative economic consequences.
“Energy and Materials show the greatest tendency to outperform when oil prices are rising, while Consumer Discretionary and Communication Services show the greatest tendency to underperform when oil prices are rising,” Lori Calvasina, RBC Capital Markets’ chief US equity strategist, wrote.
Of course, this may be another opportunity for “buy the dip” strategies — which we’re already seeing, with S&P 500 futures paring losses after opening 0.8% lower and oil’s surge also running out of steam — to prove their mettle.
“Our initial take speaking with tech investors around the globe this week and overnight... it was viewed this US strike was a matter of when, not if the US was going to do this B-2 attack and in turn this ultimately removes an overhang on the market in our view after this successful strike,” Wedbush Securities analyst Dan Ives wrote. “There could naturally be some more volatility and headline risk this week... but we would encourage investors to buy our tech winners and AI Revolution stalwarts such as Nvidia, Palantir, Microsoft, Amazon, Oracle, Tesla on any weakness from geopolitical headlines.”
The US Department of Energy estimates that Iran’s oil output was roughly 4.3 million barrels per day as of February, making it one of the 10 biggest crude-producing nations. The Middle Eastern country’s oil exports have faced a “maximum pressure” sanctions campaign from the Trump administration in a bid to curb any attempts at developing a nuclear weapon.
“Iran’s best option right now will likely be to try to leverage financial and oil market risk aversion and fear of escalation,” wrote Jacob Funk Kirkegaard of 22V Research. “Recalling that Trump’s direct attack on Iran represents an unprecedented step and market participants will fear more such ‘previous red lines will be broken’, it cannot be ruled out that Iran will have some success in manipulating short-term market reactions.”
Traders will especially sensitive to any news surrounding the Strait of Hormuz, an important choke point for global energy flows.
“Our base case has been and remains that Iran will have neither the desire nor capability to ‘close’ the Strait of Hormuz — instead limiting its attacks to the same ‘harassment’ tactics it has resorted to many times before over the years,” Andrew Bishop, global head of policy research at Signum Global Advisors, said. “Iran’s optimal strategy would be to rattle Hormuz oil flows just enough to hurt the US via moderate upward price movement, but not enough to provoke a major US response against Iran’s oil production and export capacity.”
