Oil prices spiked nearly 8% to around $74 a barrel following Israel’s airstrikes on Iran’s key military figures and nuclear facilities, the highest price since early April. This surge led to a more than 1% decline in major U.S. stock indexes during premarket trading, although losses were later moderated as investors reassessed the potential fallout from the conflict. Technology stocks such as Nvidia and Tesla experienced downturns, while shares in oil and defense firms like Chevron and Lockheed Martin increased.
Gold prices rose over 1% to a monthly high of approximately $3,440 an ounce, indicating a flight to safety amid geopolitical tensions. In contrast, Bitcoin fell nearly 1% to under $105,000, while U.S. bond prices remained stable.
The strikes by Israel marked a significant escalation of tensions, with Israeli officials indicating a “lengthy operation” ahead. President Trump mentioned “much more to come” and advised Iran to negotiate. In retaliation, Iran launched drones toward Israel and threatened U.S. assets in the region.
While rising oil prices typically lead to increased gasoline costs for consumers, experts suggested that fears of impending price surges might be overstated, noting that gas prices would remain manageable compared to household incomes. This oil price volatility could exacerbate inflation concerns, complicating the Federal Reserve’s decision-making as it navigates a weakening job market alongside potential impacts from Trump’s tariffs.
Prior to the strikes, the stock market had been on an upward trajectory, buoyed by indications that the Trump administration was pursuing improved trade relations with China.
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