Hegseth says on Iran: ‘This is not Iraq. This is not endless.
Army Secretary Pete Hegseth said the operation against Iran is not “open-ended” like it is in Iraq.
(Reuters) – U.S. stock index futures fell on Tuesday as investors assessed the impact of the U.S. and Israeli attack on Iran and its potential impact on inflation and global trade.
Iran’s government has vowed to close the Strait of Hormuz and said it will fire on ships attempting to cross, sending global oil prices and shipping rates higher. The strait handles about one-fifth of the world’s total oil consumption.
Industries exposed to oil prices, such as airlines and travel, fell for a second day. Delta DAL.N and Royal Caribbean RCL.N each fell about 3%.
“A lot will depend on oil prices,” said Deutsche Bank’s strategist group led by Jim Reid. “If the spike persists, it will definitely trigger a more meaningful risk-off move.”
Investors worried that higher oil prices could spur inflation across the economy and further complicate policy decisions for central bankers who are already battling higher prices from tariffs.
The yield on the 10-year U.S. Treasury note US10YT=RR rose to its highest level in more than a week, data compiled by LSEG showed.
Markets will be watching for new signals from the Fed given the recent division over interest rate trends. Voters John Williams, Jeffrey Schmidt and Neel Kashkari are scheduled to speak later in the day.
Later this week, a jam-packed set of U.S. statistics is expected to be released, including January retail sales, ADP jobs, and the much-anticipated non-farm payrolls report.
As of 4:28 a.m. ET, the Dow E-mini YMcv1 was down 707 points, or 1.45%, the S&P 500 E-mini EScv1 was down 106 points, or 1.54%, and the Nasdaq 100 E-mini NQcv1 was down 511 points, or 2%.
Futures tracking the small-cap index RTYcv1 fell 2.3%, while Wall Street’s fear gauge CBOE Volatility Index .VIX rose to a three-month high of 25.56 points.
Oil and gas stocks and defense stocks were among the few stocks that gained. U.S.-listed shares of Occidental OXY.N rose 3%, Cheniere Energy LNG.N rose 8% and Scorpio Tankers STNG.N rose 2.2%. Lockheed Martin LMT.N rose 1.4% and RTX RTX.N rose 1%.
AI powerhouses Nvidia NVDA.O and Microsoft MSFT.O also fell.
US investors are also weathering uncertainty about the extent of disruption that AI models could have on traditional businesses, along with jitters in the private credit sector.
Mongo Database MDB.O shares plunged 27% after the database software company’s quarterly profit forecast fell short of market expectations.
(Reporting by Johan M. Cherian and Pranav Kashyap in Bengaluru; Editing by Saumyadev Chakrabarty)
