US stock futures tumbled on Monday while oil prices surged, after military strikes by the US and Israel on Iran jolted global markets.

Dow Jones Industrial Average futures (YM=F) sank 1%, or over 500 points. Contracts on the S&P 500 (ES=F) also lost 1%, while those on the tech-heavy Nasdaq 100 (NQ=F) dived 1.4% as the escalating Middle East conflict spurred a retreat from risk assets.

The impact on oil prices, and in turn on inflation, is front of mind for investors already uneasy about the backdrop for stocks. The S&P 500 (^GSPC) closed February in negative territory as renewed volatility in AI and software names rattled markets.

Oil prices jumped, with Brent crude futures (BZ=F) surging 13% to top $82 a barrel but moderating gains to around 10% at last check. West Texas Intermediate futures (CL=F) traded just above $73, up around 9%. While Iran is OPEC’s fourth-largest producer, markets are also bracing for sustained disruption in the key Strait of Hormuz, where tanker traffic is at a standstill.

Elsewhere in markets, gold (GC=F) jumped to top $5,400 an ounce, even as the dollar (DX-Y.NYB) rose. Treasury yields (^TNX) across the board moved higher as markets cut back bets on interest-rate cuts on the prospect of hotter inflation.

The next key input into those rate calculations comes Friday, with the release of the monthy jobs report. Economists expect the US to have added 60,000 jobs in February, down from January’s stronger-than-expected 130,000 gain that eased recession fears.

Also ahead, earnings season highlights this week are chipmaker Broadcom's (AVGO) report on Wednesday, followed by Marvell Technology (MRVL) on Thursday, for insight into the AI trade. Economy watchers will scrutinize retailers' results, led by Target (TGT) and Costco (COST).

The markets have started to react to the US-Israeli conflict with Iran, with airline, hotel and defence stocks all rising as global equities opened again this week. US defense stocks, Lockheed Martin (LMT), rose 7% before the bell on Monday, alongside RTX (RTX). BAE Systems' (BA.L) London shares were up 5%.

Energy companies also saw their stocks jump, with New Fortress Energy's (NFE) shares rising 15% during premarket hours, and oil major Equinor ASA (EQNR) rose 4%.

Bloomberg News reports:

Airlines and hotels stocks slid, while energy and defense stocks jumped, as global equities opened the week in risk-off mode following US and Israeli strikes on Iran.

In Europe, the Stoxx 600 Index fell as much as 1.9% at the the open, with hotelier Accor SA and British Airways owner IAG SA among the steepest fallers on concerns that surging fuel costs and possible airspace disruptions would hit the travel sector. By contrast, oil major Equinor ASA and UK defense contractor BAE Systems led gains in their respective sectors.

Investors are grappling with the risk that the conflict in the Middle East could disrupt global energy supplies and stoke inflation. The reaction was most pronounced in oil, with Brent crude surging as much as 13% before paring gains.

Read more here.

Gold prices catching a strong bid this morning to over $5,400 an ounce.

Helpful chart from JP Morgan showing how gold prices have reacted around prior Middle East conflicts:

The JP Morgan team sees upside potential to oil prices to $120 a barrel if the war spreads throughout the Middle East:

\\"The main risk in our view remains that the regime could lose command and control over the IRGC—as highlighted by the recent attack in Oman—which would introduce a far more unpredictable and destabilizing scenario for regional oil supply and markets. Retaliation from Hezbollah could further amplify these risks. A prolonged escalation—especially if Iran applies economic pressure—could push prices much higher. We estimate that if the conflict lasts more than three weeks, GCC oil producers would exhaust storage capacity and would be forced to shut in production. Under this scenario, Brent could trade in the $100-$120 range. Given the timeline of these unknowns, we are not making changes to our existing price forecast at this stage.\\"

No surprise here, some of the most visited ticker pages on Yahoo Finance this morning include Exxon Mobil (XOM), Lockheed Martin (LMT), Chevron (CVX) and Occidental Petroleum (OXY).

You can check out the full list of names here.

Some helpful charts from EvercoreISI on the exposures for the oil majors.

Oil prices have surged this morning post the launch of the US attacks on Iran.

Goldman thinks a good deal of upside may be left for prices:

\\"Based on the 15% weekend gain in retail prices, we estimate an $18/bbl real-time risk premium in crude oil prices, which corresponds approximately to our estimate of the fair value effect of a six-week full halt in Strait of Hormuz flows (allowing for spare pipeline capacity use as a partial offset). This estimated impact moderates to +$4 if only 50% of the flows are halted for one month. However, oil prices can rise substantially more if the market demands a premium for the risk of more persistent supply disruptions.\\"

How the Goldman is thinking about the markets in the wake of the US attacks against Iran:

\\"For equities and credit the impact is negative, but only a severe and sustained oil disruption would imply substantial consequences for global growth. We expect cyclical sectors and oil importers—some of which have had strong starts to the year and may face vulnerability from positioning adjustments—will likely see pressure unless a resolution occurs quickly.\\"

President Trump said on Sunday that the bombing against Iran will continue for several weeks and called for Tehran's leaders to surrender. However, Iran's security chief said it has no intention of negotiating with the US.

Blasts continued across Bahrain, Kuwait, the United Arab Emirates, and Qatar, as the Gulf states intercepted missiles launched by Iran in retaliation for the US-Israeli strikes, showing the war is spreading beyond Iran's borders.

Trump is calling on Iran's leaders to hand power to the nation's people, and according to a report in the Atlantic, Trump has agreed to speak with Iran's new leadership.

The conflict has entered its third day since US-Israeli forces began airstrikes against Iran over the weekend. The intense missile fire indicates that Tehran is not ready to negotiate, even as the country's supreme leader and top military officials have been killed.

Bloomberg News reports:

Iran’s security chief Ali Larijani said Tehran won’t negotiate with the US, responding to reports that he had reached out to American officials through Omani mediators.

Over the past 48 hours, the Trump has made various and sometimes contradictory statements on the goals of the attack, including that it could end in a few days or last four to five weeks, and that the ultimate aim is the freedom of Iranians but also that he could cut a deal with the remnants of the Islamic Republic, though the main candidates he was considering are now dead.

At the same time, Israel, also under fire from Iran and its aligned Hezbollah fighters in southern Lebanon, launched an offensive against the group.

Read more here.

Yahoo Finance's Ines Ferré reports:

Bitcoin (BTC-USD) dropped below $67,000 on Sunday night after recovering from a sharp sell-off immediately following US-Israel air strikes on Iran and subsequent counterattacks in the region.

The token fell roughly 2% over the past 24 hours, as US stock futures also moved lower as the Middle East conflict rattled global markets.

The world’s largest cryptocurrency dropped to around $63,255 early Saturday amid the strikes. That same day it climbed above $68,000 as reports spread that Iran’s Supreme Leader Ayatollah Ali Khamenei had been killed.

Ether (ETH-USD) also traded near $1,950 on Sunday after tumbling roughly 10% in the wake of the attacks.

“Crypto’s resilience in the face of geopolitical escalation is constructive and suggests room for tactical upside as defensive positioning unwinds” Sean Farrell, head of digital assets at Fundstrat, told Yahoo Finance on Sunday.

However, the strategist noted that geopolitical sell-offs are typically buyable unless they lead to a more sustained economic impact, in this case through energy markets.

Read more here.

Bloomberg reports:

Gold (GC=F) rose, as war in the Middle East rattled markets and sent investors flocking to safer assets.

Bullion climbed more than 2% to around $5,390 an ounce in early trading, having gained more than 3% in the previous week as American troops amassed in the region. Conflict spread over the weekend after the US and Israel attacked Iran and Tehran responded with waves of missiles at targets in multiple countries. Iran’s supreme leader, Ayatollah Ali Khamenei, was killed on the first day of strikes.

Wider geopolitical tensions and US President Donald Trump’s upheaval of international relations have been key factors in a long-running rally for gold, which has also been supported by elevated central-bank buying and a wider investor shift away from sovereign bonds and currencies. The metal has gained about a quarter so far this year, despite an abrupt pullback from a record high above $5,595 an ounce at the end of January.

Bullion posted its seventh consecutive monthly gain in February, the longest streak since 1973. Even ahead of the war with Iran, Trump had adopted an increasingly aggressive foreign policy. US troops seized Venezuela’s then-president Nicolás Maduro in January and the administration made threats to annex Greenland.

Read more here.

Yahoo Finance's Jake Conley reports:

Oil futures surged upward on Sunday evening as traders price in the first open market session after the start of an escalating conflict in the Middle East that is increasingly threatening energy infrastructure.

Futures on Brent crude (BZ=F), the international pricing benchmark, jumped by 13% to trade above $82 per barrel in the first minutes of open trading, while those on US benchmark West Texas Intermediate (CL=F) crude, rose by nearly 10% to cross $70 per barrel.

The price on Brent marks a level not seen since January 2025 as the conflict in Iran has engulfed the entire region, while WTI reached levels not seen since 2025's \\"12-day war.\\"

Gold (GC=F) also picked up more than 2% as investors ran to the precious metal for its flight-to-safety status, while the US dollar (DX-Y.NYB) appreciated by roughly 0.3%. Shares in Saudi Aramco (2223.SR) rose by more than 3% in the Middle Eastern trading session on the prospect for higher oil prices.

Beginning early Saturday morning, the US and Israel have launched a massive barrage of air strikes into Iran in what President Trump has called a bid to destroy the country's nuclear program and potentially remove the current regime from power. Iranian Supreme Leader Ali Khamenei, who had led Iran for more than 30 years, was killed on Saturday, President Trump said in a Truth Social post.

Read more here.