Seventh American service member dies in Iran war
A seventh U.S. service member has died from injuries sustained in Iran’s initial counterattack as conflicts continue across the Middle East.
March 9 (Reuters) – U.S. stock index futures fell more than 1% on Monday as fighting in the Middle East entered its 10th day and inflation concerns grew and oil prices soared.
Geopolitical tensions deepened after Iran appointed Mojtaba Khamenei to succeed his father Ali Khamenei as supreme leader. The move is seen as a clear signal that hardliners continue to hold sway in Tehran.
Oil prices soared more than 25% to just under $120 a barrel, but pared gains after reports that Group of Seven (G7) finance ministers and the International Energy Agency would discuss a joint emergency oil stockpile release, and after Saudi Aramco offered to quickly supply oil through a series of unusual bids.
The protracted conflict in the Middle East comes as a broad expansion in economic activity fuels fears of stagflation, while last week’s figures reflect a weakening job market.
“Stock markets are scrambling to catch up on all the news, but we now see the likelihood of a U.S. and global recession increasing significantly as inflation soars,” said Chris Beecham, chief market analyst at IG.
“While the coordinated release of oil reserves may provide temporary relief, it is a limited response and is dwarfed by the loss of oil production due to the closure of Hormuz and regional production disruptions.”
Travel stocks, which bore the brunt of last week’s selloff, were also among the hardest hit on Monday.
In addition to Alaska Airlines ALK.N and United Airlines UAL.O , cruise stocks such as Carnival CCL.N and Norwegian Cruises NCLH.N each fell about 4% in premarket trading.
Big banks, seen as the backbone of the economy, were also hurt, with JPMorgan Chase & Co. JPM.N , Citigroup Inc. CN and Bank of America Inc. BAC.N each falling more than 2%.
Diamondback FANG.O and APA APA.O each rose more than 3% as energy prices rose, while Occidental OXY.N rose 2%.
As of 4:42 a.m. ET, the Dow E-mini YMcv1 was down 758 points, or 1.60%, and the S&P 500 E-mini EScv1 was down 94.5 points, or 1.40%. The NASDAQ 100E Mini NQcv1 fell 385 points (1.56%).
The CBOE volatility index .VIX, Wall Street’s most closely watched measure of investor anxiety, rose 5.16 points to 34.62, its highest level since April 2025.
Prices of traditional safe-haven assets such as precious metals also came under pressure as investors flooded into the US dollar <=USD. Shares of mining companies such as Endeavor Silver EXK.N fell 6%, and Barrick Mining BN fell 3%.
Bucking the trend, defense companies such as RTX RTX.N rose 1% and Aerovironment AVAV.O rose 2.3%.
Rising energy costs are likely to complicate the Federal Reserve’s interest rate outlook amid a focus on strengthening the labor market.
Policymakers have widely expressed the need to assess the economic impact before making monetary policy decisions. However, the two-year US Treasury yield US2YT=RR reflected interest rate expectations and temporarily reached its highest level since late November.
The futures market RTYcv1, which tracks the interest rate-sensitive Russell 2000 index, fell 2.5% and is 10% off its all-time high. A 10% decline is commonly known as correction territory for the index.
Friday’s weak jobs report raised expectations for a 25 basis point rate cut in June. But traders are now pushing those odds to the possibility of September or October, according to data compiled by LSEG.
Last week, the Dow Jones Industrial Average fell 0.95%, marking its steepest weekly decline since early April 2025. The S&P 500 index fell 1.33%, its worst week since mid-October, while the Russell 2000 index posted its biggest weekly decline since early August.
Markets face an important week filled with high-stakes economic announcements. This week, job numbers, personal consumption spending data (the Fed’s preferred measure of inflation) and a second estimate of quarterly GDP are expected to be released.
(Reporting by Johan M. Cherian, Pranav Kashyap and Shashwat Chauhan in Bengaluru; Editing by Mrigank Dhaniwala and Maju Samuel)
