- Joint U.S.-Israel strikes on Iran killed Supreme Leader Ayatollah Ali Khamenei on Saturday.
- Subsequent updates from the Israeli administration’s official channels highlighted the killings of several others in Iran’s political and intelligence apparatus.
- Crude oil prices rose to an eight-month high on Monday following the closure of the Strait of Hormuz.
U.S. stock futures were lower early Monday amid the escalation of tensions in the Middle East following attacks by the United States and Israel on Iran.
The strikes on Iran killed Supreme Leader Ayatollah Ali Khamenei on Saturday. Subsequent updates from the Israeli administration’s official channels, including its military and air force, highlighted the killings of several others in Iran’s political and intelligence apparatus.
Iran’s ambassador to the International Atomic Energy Agency stated that the country’s nuclear site at Natanz has been hit in the U.S.-Israel strikes, according to a Reuters report.
As of 5:30 a.m. ET on Monday, S&P futures traded 1% lower, Dow futures were down 1.1%, and Nasdaq futures declined 1.4%, while Russell 2000 futures lost 1.2%.
Meanwhile, retail sentiment toward the SPDR S&P 500 ETF (SPY) has remained ‘bullish’, while the Invesco QQQ Trust (QQQ) ETF, which tracks the Nasdaq 100 Index, has remained ‘neutral’.
Crude Oil Prices On The Boil
Crude oil prices rose to an eight-month high on Monday following the closure of the Strait of Hormuz.
At the time of writing, U.S. West Texas Intermediate (WTI) crude futures maturing in April were up 7.5% to $72 per barrel. Brent crude futures maturing in May gained 8% to $78.7 per barrel.
Analysts at ING Think pointed out that while the U.S. has limited trade exposure to the Strait of Hormuz, its closure would fuel an increase in global oil prices, exacerbating the current cost-of-living crisis.
“U.S. consumers are already stretched, and gasoline prices are acutely politically sensitive going into midterm territory. Higher oil prices would also complicate the Federal Reserve's future monetary policy path,” the firm stated in its latest note.
Trending Stocks To Watch
Lockheed Martin (LMT), RTX (RTX), Northrop Grumman (NOC): Defense stocks soared in Monday’s pre-market trade, gaining between 6% and 8% amid the rising tensions in the Middle East.
Exxon Mobil (XOM), Battalion Oil (BATL), Chevron (CVX): Exxon Mobil and Chevron stocks rose about 5% in Monday’s pre-market session amid a boil in oil prices during the Iran conflict. Battalion Oil shares soared about 85%, continuing to trend upward and building on the 33% gains the stock registered on Friday. Crude oil ETFs also saw an uptick.
Berkshire Hathaway (BRK-A, BRK-B): Berkshire Hathaway’s shares were down about 2% pre-market on Monday after the company’s fourth-quarter (Q4) results missed Wall Street expectations. Berkshire reported earnings per share (EPS) of $4.73 on Saturday, missing an expected EPS of $5.51, according to Fiscal.ai data. Berkshire CEO Greg Abel stated that the company is “evaluating opportunities” regarding its cash position.
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