US stocks began to pare losses through late morning trading on Monday while oil prices surged after military strikes by the US and Israel on Iran were followed by counterattacks, sending shockwaves through global markets.

The Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) both pared back to a loss of roughly 0.5%, while the tech-heavy Nasdaq Composite (^IXIC) rebalanced to a loss of 0.3% 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 closed February in negative territory after renewed volatility in AI and software names rattled markets.

Oil prices jumped Monday, with Brent crude futures (BZ=F) surging as much as 13% to top $82 a barrel but moderating gains to slip below $79 at last check. West Texas Intermediate futures (CL=F) traded just below $72. 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.

Shares in energy major Exxon (XOM) popped, while defense stocks including Lockheed Martin (LMT) also found buyers. But travel-linked stocks slipped, with Delta Air Lines (DAL) dropping in the fallout.

Elsewhere in markets, gold (GC=F) jumped to tap $5,400 an ounce even as the dollar (DX-Y.NYB) rose. JPMorgan said it expects a "risk premium" gain of up to 10% for the precious metal. Meanwhile, Treasury yields (^TNX) 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 monthly jobs report. Economists expect US payrolls to have added 60,000 jobs in February, down from January’s stronger-than-expected 130,000 gain that eased recession fears.

Paramount Skydance (PSKY) said Monday morning that it plans to combine its Paramount+ streaming platform with Warner Bros. Discovery's (WBD) HBO Max once Paramount's acquisition of WBD closes.

The move is a potential challenge to streaming rival Netflix (NFLX), which bowed out of the race for WBD after Paramount raised the price of its offer to acquire WBD.

Shares in Paramount traded down by roughly 3%, while Netflix stock inched higher.

In a call with investors on Monday, Paramount CEO David Ellison said the company doesn't plan to cut production and that his company's purchase of WBD is \\"pro-competition, pro-consumer and pro-creative community,\\" according to Bloomberg. Paramount is targeting 15 theatrical films a year per studio for a total of at least 30 films annually, Bloomberg reported.

Executives on the call said they expect the deal to close in the third quarter, and that they expect both companies to have $69 billion in pro-forma revenue and $18 billion in estimated earnings before interest, taxes, depreciation, and amortization, with a combined net of $79 billion, according to Bloomberg.

Natural gas prices on the European energy market (TTF=F) have soared, gaining more than 45% through Monday trading before slightly paring gains as investors assess the conflict in Iran and the news that QatarEnergy is halting production of liquified natural gas (LNG).

Oil (CL=F, BZ=F) is the headline commodity risk for conflict in the Middle East and disruptions to tanker movement through the Strait of Hormuz, a critical global shipping chokepoint that runs between the coasts of Iran and Oman. But the corridor is also key for the gas market, as roughly 20% of global LNG supply crosses its waters every day.

Tanker traffic through the Strait has essentially halted since the US and Israel began striking Iran early Saturday morning, already tightening. Iran's Revolutionary Guard Corps have instructed ships not to pass through the corridor, at least three tankers have been attacked, and major insurers have begun denying \\"war risk\\" insurance.

On Monday, Qatar's QatarEnergy, one of the largest global producers of LNG, announced it was halting operations after the company's facilities were struck by drones. Qatar itself is responsible for roughly 20% of the world's LNG trade.

The pause in Qatar, alongside the stoppage of traffic of already-loaded LNG through the Strait, has put immense pressure on the European market.

The first 90 minutes of trading is showing some clear patterns — some expected, some not.

Defense and energy names are topping the S&P 500 (^GSPC), with Palantir (PLTR) and its deep connections to the US government at the top — up 6%. Axon (AXON), Northrop Grumman (NOC), RTX (RTX), and L3Harris (LHX) are also leaders (up 2%-4%).

In energy, Marathon Petro (MPC), APA (APA), Defon (DVN), Valero (VLO) and ConocoPhillips (COP) are all up 3-4%.

Interestingly, bitcoin is rallying in the face of dollar strength, catapulting Strategy (MSTR) to the top of the Nasdaq 100 Index (^NDX) — up 7%. And in the S&P 500, Coinbase (COIN) is the #3 gainer — up 4%.

Large-cap energy (XLE) opened with a 3.5% gain, which has faded to 1% in the opening minutes.

To the downside, consumer discretionary (XLY), materials (XLB), financials (XLF), and communication services (XLC) are all off 1% or more.

Meanwhile, the S&P 500 index (^GSPC) itself opened with a 1% loss right around the big 6,800 level — but it's now rebounded. This is the fourth test of 6,800 this year and is one to watch into the close.

The sideways trading ranges in the S&P and the Nasdaq (^IXIC) have been frustrating the bulls and the bears since late last year.

The major US stock indexes careened into the red at the opening bell on Monday as investors fled to safe-haven assets. The tumble comes as the US-Iran conflict continues to broaden out, engulfing an increasingly large part of the Middle East.

The Dow Jones Industrial Average (^DJI) fell by 1.1%, or just over 500 points. Meanwhile, the S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) sank 0.9% and 0.8%, respectively.

Oil prices surged on Monday, as Brent crude (BZ=F) jumped by as much as 13% to top $82 a barrel before slightly paring back gains. West Texas Intermediate futures (CL=F) changed hands just below $73, up around 8%. 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.

In Europe, gas futures (TTF=F) — heavily exposed to disruption to gas flows through the Strait of Hormuz — exploded higher by more than 45%.

The dollar (DX-Y.NYB) and gold futures (GC=F) are both bid as we await the opening bell for stocks — a reminder that cash and bullion can rally together when investors scramble for safe havens.

Besides gold (and silver to a limited extent), crude oil is also surging. WTI (CL=F) is ripping on obvious supply-risk fears tied to geopolitics, and it’s dragging energy stocks higher even as most sectors are set to open in the red.

The twist: long-term US Treasurys yields (^TNX, ^TYX) are spiking as bonds are getting dumped, not bought. That’s as investors demand extra yield for longer-term risk (what's called the term premium) — plus systematic strategies dialing down longer-term (duration) exposure as volatility rises.

Geopolitical shocks often fade fast in markets, but some linger. Watch the Cboe Volatility Index (^VIX) above 20 as a gauge of institutional hedging demand (read: skittishness).

Nvidia (NVDA) said it struck two strategic partnerships with photonics companies Coherent (COHR) and Lumentum (LITE) on Monday in an effort to develop and secure access to state-of-the-art optics technology for the next generation of AI data centers.

Nvidia stock fell 1.2% in premarket trading following the announcement, while Coherent shares jumped around 8% and Lumentum stock also surged over 7%.

Nvidia agreed to invest $2 billion in Coherent to support the company's future operations as it expands its US manufacturing capabilities. As part of the agreement, Nvidia made a multibillion-dollar purchase commitment and received rights to access advanced laser and optical networking products in the future.

The Santa Clara-based company also announced a similar partnership with Lumentum, also investing $2 billion to support research & development and a new fab based in the US.

Nvidia has been rapidly scaling up its networking business and is betting that the relatively smaller photonics industry can help it make large-scale AI networks more energy efficient, reducing a bottleneck on artificial intelligence growth.

“Computing has fundamentally changed,\\" Nvidia CEO Jensen Huang said in a statement. \\"In the age of AI, software runs on intelligence with tokens generated in real time by AI factories for every interaction and every context. With Coherent, NVIDIA is pioneering next-generation silicon photonics to enable AI infrastructure at unprecedented scale, speed and energy efficiency.”

From Bloomberg:

Morgan Stanley strategists see the eruption of conflict in Iran and the Middle East as unlikely to derail their bullish view on US stocks, barring a sharp and sustained surge in oil prices.

Geopolitical risk events historically haven’t resulted in sustained volatility for US equities, the team led by Mike Wilson wrote in a note, citing the average performance of the S&P 500 (^GSPC) index in months following such episodes.

In terms of the latest Iran conflict, the bear case stems from a sharp and persistent rise in oil prices, which could compromise what the strategists see as a strengthening business cycle, the strategists said.

“Unless oil prices spike in a historically significant manner and remain elevated, recent events are unlikely to change our bullish view on US equities over the next 6-12 months,” they wrote.

Read more here.

Norwegian Cruise Line Holdings Ltd. (NCLH) stock fell 7% before the bell on Monday. The cruise line released its fourth quarter earnings, and despite beating analyst estimates, the group's stock fell as investors worried about the rise of oil prices driving up fuel costs. Royal Caribbean (RCL) shares also fell 5% during premarket hours today.

Berkshire Hathaway's (BRK-B) stock fell 1% during premarket hours following the release of its fourth quarter earnings on Saturday. Berkshire's operating profit after taxes fell 30% from a year ago.

American Airlines' (AAL) stock fell 5% before the bell on Monday, as the rise in oil prices caused worry among investors that fuel costs would increase.

Gold futures (GC=F) rose on Monday, trading above $5,400 per ounce as the ongoing conflict in the Middle East caused investors to move toward safe-haven assets.

Yahoo Finance's Ines Ferré reports:

Silver (SI=F) also rose, following the broader move higher in precious metals.

JPMorgan analysts expect a \\"risk premium\\" jump in gold prices in the near-term of more than 5% to 10% in the aftermath of US-Israel strikes on Iran over the weekend and counter attacks in the region.

However, those geopolitical price spikes can “can be sharp but hard to sustain,\\" said the analysts.

Gains could reverse if the conflict eases, or equity market losses prompt investors to sell assets to cover losses or raise cash. On Monday US stocks were poised to open sharply lower.

Despite the potential for short-term volatility, JPMorgan forecasts demand from central banks and investors will ultimately push gold prices to $6,300 per ounce by the end of 2026.

“A near-term boost in geopolitical risk premium is clearly aligned with our bullish view on gold, but it is far from the sole reason we remain structurally bullish on the metal,” wrote JPMorgan's Patrick Jones.

Read more here.

The 10-year Treasury yield is rising alongside those for US bonds more broadly, even as the spiraling US-Iran conflict sparks a risk-off mood in markets.

From Bloomberg:

US Treasuries fell as conflict in the Middle East sent oil prices soaring, stoking fear inflation will accelerate and forcing traders to scale back wagers on the scope of interest-rate cuts.

Rather than sheltering in US government debt as typically happens in times of global market turbulence, bond traders focused instead on the danger that fighting across the region reignites inflation — potentially dimming the chances of more Federal Reserve easing. US President Donald Trump, who is pushing for regime change in Iran, has said the bombing campaign could continue for weeks.

Shorter-dated bonds led the move, sending the two-year yield four basis points higher to 3.42%, while the rate on 10-year notes rose three basis points to 3.97%. Money markets shifted back the possible timing of the Fed’s next rate cut by two months to September.

“The ‘bond-as-haven’ trade becomes less clean,” if higher oil prices keep inflation pressures elevated, said Charu Chanana, chief investment strategist at Saxo Markets in Singapore.

Read more here.

The dollar (DX=F) rose against other currencies as high oil prices led investors to think the Federal Reserve won't cut rates soon.

Bloomberg News reports:

Bloomberg’s gauge of the dollar rose as much as 0.8% to its highest since early February following the weekend’s US and Israeli military strikes on Iran. With the effective closure of the key Strait of Hormuz driving up oil by the most in four years, the inflationary impact has swaps traders pricing 56 basis points of Fed rate cuts this year, down from 60 basis points on Friday.

“It’s probably an early sign that the market thinks the Fed will be less inclined to cut rates if this oil price surge is sustained and ultimately translates into higher US inflationary pressure,” said Gareth Berry, a strategist at Macquarie Group in Singapore. “This is contributing to dollar strength — on top of the risk-off tone — while at the same time causing some mild selling of US Treasuries.”

Read more here.

Tesla (TSLA) gained market share again in France and Norway in February, according to official data, in a sign of stabilization in Europe after two years of declining sales. Tesla stock fell 2% before the bell on Monday.

Reuters reports:

In France, the automaker's registrations, ​a proxy for sales, rose 55% even as most rivals sold fewer cars than a year ago.

They increased 32% in Norway, but fell 18% in Denmark, ‌the first countries ⁠to publish February data, with others including Italy and Spain set to report through ⁠the day.

Tesla saw European sales drop 27% last year amid rising competition, particularly from Chinese EV brands, ​controversy over ​Musk's politics and an ​ageing model lineup.

Last year ‌Tesla unveiled cheaper versions of its Model Y and Model 3 in the United States and Europe, which started to roll out to consumers late last year.

Read more here.

Airline, hotel, and defense stocks began to react to the Iran conflict on Monday during premarket hours. Lockheed Martin (LMT) shares 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 (NFE) shares rising 15% in premarket trading. 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 (GC=F) prices catching a strong bid this morning to over $5,400 an ounce.

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

The JPMorgan team sees upside potential for oil (CL=F, BZ=F) 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 (CL=F, BZ=F) 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 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. But 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. The conflict has entered its third day since US-Israeli forces began airstrikes against Iran over the weekend.

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

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.