Dow, S&P 500, Nasdaq futures plunge as fresh strikes intensify Iran conflict

US Treasurys followed other bond markets lower, with traders retreating from bets for interest-rate cuts in response to the potentially inflationary impact of an escalating Iran war.

Bloomberg reports:

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From Bloomberg:

The US sent conflicting messages about how long a war with Iran might last as Israel launched new airstrikes on Monday, with the widening conflict reverberating across the Middle East and upending energy markets.

Defense Secretary Pete Hegseth rejected the idea of an “endless” war with Iran. But President Donald Trump later insisted there was no fixed timeline. Both refused to rule out putting American boots on the ground.

“Whatever the time is, it’s okay — whatever it takes,” Trump said. “Right from the beginning, we projected four to five weeks. But we have capability to go far longer than that.”

… The Trump administration will soon roll out a program to help mitigate rising energy costs, Secretary of State Marco Rubio told reporters in Washington before heading into a briefing for US lawmakers. He said the campaign would only intensify.

“I’m not going to give away the details of our tactical efforts, but the hardest hits are yet to come from the US military,” Rubio said.

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Iranian drone strikes forced QatarEnergy to halt production at Ras Laffan and Mesaieed, effectively taking one-fifth of global LNG export capacity offline in a single geopolitical event.

From Oilprice.com:

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Crude oil futures (BZ=F, CL=F) continued to rise on Tuesday as fresh Mideast strikes spurred concerns that hostilities could disrupt key supply routes and reignite inflation pressures.

Bloomberg reports:

Oil extended gains as the US and Israel stepped up their war against Iran, while Tehran vowed a full closure of the Strait of Hormuz and hit the American embassy in Riyadh with drones.

Global benchmark Brent rose above $80 a barrel, after spiking about 7% on Monday, while West Texas Intermediate was near $73. President Donald Trump said the US would do “whatever it takes,” and Secretary of State Marco Rubio told reporters the military campaign was set to intensify.

… Global energy markets have been upended by the war, which erupted on Saturday and then spread across the oil-rich Middle East as Iran sought to retaliate against Israel and states hosting US forces. Oil prices have spiked, along with natural gas and petroleum products such as diesel, potentially fueling a wave of inflation across the world. Coal has also jumped.

“With the Strait of Hormuz still inactive, the clock is ticking,” JPMorgan Chase & Co. analysts including Natasha Kaneva said in a note, flagging scope for some Persian Gulf producers to cut output within weeks if storage fills.

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Bloomberg reports:

South Korean stocks slumped as Middle East tensions stoked concern over the impact of rising energy costs, with global funds offloading more than $3 billion of local equities amid a wave of risk-off sentiment.

The benchmark Kospi (^KS11) sank 7.2% in its worst session since August 2024, as the market reopened after a holiday. Chip heavyweights Samsung Electronics Co. (005930.KS) and SK Hynix Inc. (000660.KS) dragged the gauge lower, dropping at least 9.9% each.

A prolonged war could be a major test of the world-beating rally in Korean equities, with the Kospi still up 37% this year. Samsung and SK Hynix powered much of the gains on the back of surging global memory amid the artificial intelligence boom. Tuesday’s drop shaved around $170 billion in combined market cap from the duo, unnerving investors who had jumped into the rally betting the gains will extend.

“An extended conflict involving Iran risks keeping crude prices elevated, reinforcing upside inflation risks and complicating the Federal Reserve’s path toward policy easing,” said Jung In Yun, chief executive officer at Fibonacci Asset Management Global.

“That macro backdrop is weighing on AI-linked equities, where stretched valuations are increasingly sensitive to shifts in rates and liquidity expectations.”

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Reuters reports:

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