Visual release of Iran attack
The United States has released images purporting to show American warships and aircraft launching attacks against Iran.
March 2 (Reuters) – U.S. stock index futures fell more than 1% on Monday as investors increasingly priced in the prospect that the Middle East conflict could last for weeks, disrupting global trade flows and increasing inflationary pressures.
The worst-hit sectors in pre-market trading included airlines, with multiple airlines grounded and oil prices surging 8%, and a cloudy outlook for the global economy weighing on financial stocks.
Delta DAL.N and United Airlines UAL.O each fell more than 5% in premarket trading. Big banks such as Bank of America BAC.N and Citigroup CN each fell more than 2%.
Investors instead flocked to traditional safe-haven assets such as the dollar USD=, with rising precious metal prices pushing mining companies such as Gold Fields GFI.N up 3.6% and Barrick Mining BN up 2.8%.
Defense stocks such as Lockheed Martin LMT.N and RTX RTX.N also made bids, each rising about 6%, while Kratos KTOS.O rose 9% and AeroVironment AVAV.O rose 10.3%.
Last weekend’s coordinated U.S.-Israeli attack on Iran killed Supreme Leader Ayatollah Khamenei, prompting Israel to launch retaliatory strikes following airstrikes in Lebanon by Iran and Hezbollah militants, deepening fears that the conflict could spread further across the region.
US President Donald Trump also said the conflict could last another four weeks, according to the report, adding that attacks would continue until the US achieved its stated objectives.
Analysts at SocGen said: “While jumping to conclusions about President Trump’s policy actions and statements over the weekend can be both the right thing to do and the wrong thing to do, the most important takeaway from the president’s broadcast yesterday was that US actions will last ‘weeks’ rather than days. This promises to have a more lasting impact on markets.”
As of 4:17 a.m. ET, the Dow E-mini YMcv1 was down 572 points, or 1.17%, the S&P 500 E-mini EScv1 was down 75.75 points, or 1.1%, and the Nasdaq 100 E-mini NQcv1 was down 364.5 points, or 1.46%.
CBOE’s VIX index .VIX, Wall Street’s fear gauge, rose 3.84 points to a three-month high of 23.7.
This geopolitical shock comes at a time when markets are already in a state of uncertainty due to concerns about AI disruption, uncertainty in the private credit sector, and a cloudy trade outlook.
The S&P 500 and Nasdaq posted their biggest monthly declines since March 2025. In contrast, the Dow was able to sustain gains for 10 consecutive months, its longest winning streak since the 10 months that ended in January 2018.
A prolonged spike in oil prices risks reigniting inflationary pressures, with traders already grappling with rising inflation and increasing expectations that the Federal Reserve is unlikely to cut its key interest rates in the near term.
Traders are also bracing for a series of important US economic announcements. Last month’s manufacturing PMI will be released later in the day, with January’s retail sales, ADP employment data and closely watched non-farm payrolls also scheduled for later in the week.
(Reporting by Pranav Kashyap, Johan M. Cherian and Shashwat Chauhan in Bengaluru; Editing by Sherry Jacob Phillips and Maju Samuel)
