US stock futures sink, oil spikes, and European markets open lower after Israeli strikes on Iran fuels war fears
Israel launched air strikes on Iran’s nuclear and military sites early Friday in an operation Prime Minister Benjamin Netanyahu said could last “as many days as it takes.” The strikes, reflecting Israel’s long-standing view of Iran’s nuclear program as an “existential threat,” reportedly killed six nuclear scientists and several of the country’s top military leaders. Iran retaliated by launching more than 100 drones toward Israeli territory.
US Secretary of State Marco Rubio said the US wasn’t involved in the strikes. President Trump had recently urged Netanyahu to hold off from taking military action. In a post on Truth Social, Trump again urged Iran to make a nuclear deal, saying, “Iran must make a deal, before there is nothing left, and save what was once known as the Iranian Empire.”
The market reaction has been aggressively risk-off in early trading on Friday:
Oil prices are up over 7%, pulling back somewhat after briefly spiking as much as 13% — the largest intraday gain since Russia’s invasion of Ukraine in 2022.
Energy stocks were up, with the Energy Select Sector SPDR Fund up more than 3% in premarket trading.
Safe haven assets have caught a bid, with gold up 1.2%, nearing April’s record high of $3,500 an ounce, as the US dollar also strengthened modestly. Treasury yields ticked higher this morning, but are broadly unchanged in the last 24 hours.
Equity indexes were in the red, with futures on the SPDR S&P 500 Trust down more than 1%. European markets were lower too, with the STOXX 600 down ~1%.
Defense stocks were also rising, with Lockheed Martin up more than 5% and L3Harris Technologies and Northrop Grumman both up ~4%.
