Stock Futures Fall, Oil Prices Surge as Volatility Grips Financial Markets Amid Iran Developments

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Stock futures slid as investors scaled back their exposure to risky assets amid the fresh dose of geopolitical and economic uncertainty sparked by developments in the Middle East. Gold, which has already hit a series of record highs in recent months, was on the rise as some investors turned to the traditional safe haven.The bombing of Iran early Saturday killed the country's Supreme Leader, Ali Khamenei, and caused damage throughout the country. It sparked a flurry of retaliatory strikes by Iran against Israel and U.S. interests in several countries across the region throughout the weekend. President Donald Trump on Sunday said that the U.S. plans to continue its combat operations in Iran for several more weeks.The escalation of conflict in the Middle East has sparked fresh geopolitical and economic uncertainty that threatens to create substantial market volatility. A surge in oil prices would have an impact on what consumers pay for gasoline, and could weigh on economic activity."The initial market reaction for this type of event would typically see Treasury yields move lower and equities lower—mostly a risk-premium repricing," Franklin Templeton Institute analysts led by Chief Investment Strategist Stephen Dover said in a report Saturday.Oil and natural gas prices are especially vulnerable to sharp moves higher, not only because the Middle East is such a major producer of the commodities but because of rising shipping costs."Oil prices are likely to gap higher, and the move may not fade quickly because the market is not only pricing barrels, but also the cost of moving barrels," said Charu Chanana, Chief Investment Strategist at Saxo. "Even without a full shutdown, higher war-risk premia, rerouting and insurance repricing can keep crude and freight costs elevated."Even before the Iran attack, oil prices had been surging amid concerns about potential military action in the Middle East, rising about 20% since the start of the year. Brent crude oil futures, the global benchmark, were up more than 6% recently at around $77.50 per barrel, trading at their highest levels since June. WTI futures, the U.S. benchmark, also rose about 6%, to $71 per barrel.As for the stocks that stand to be affected, Chanana said airlines and other travel and leisure names could be hurt by rising fuel costs and lower demand, while shares of shipping companies and firms exposed to global trade are also vulnerable. On the flip side, many energy stocks would benefit from higher oil prices, while defense, security and critical infrastructure providers also appear to be well-positioned.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,829.50 -58.75 (-0.85%)Dow Futures48,558.00 -387.00 (-0.79%)Nasdaq Futures24,764.75 -260.50 (-1.04%)Russell 2000 Futures2,625.60 -32.30 (-1.22%)VIX21.44 +1.58 (+7.96%)Gold5,321.70 +10.10 (+0.19%)Trending tickersBTC-USD Bitcoin USD 67,874.39 +1,587.77 (+2.40%)MDB MongoDB, Inc. 325.01 -3.46 (-1.05%)BRK-B Berkshire Hathaway Inc. 480.17 -24.78 (-4.91%)F Ford Motor Company 13.39 -0.70 (-4.97%)CRDO Credo Technology Group Holding Ltd 114.22 +1.95 (+1.74%)PortfolioSign in to access your portfolioSign inTop gainersEMAT Evolution Metals & Technologies Corp. 10.16 +2.19 (+27.48%)OCUL Ocular Therapeutix, Inc. 10.98 +2.04 (+22.82%)AXTI AXT, Inc. 46.32 +8.42 (+22.22%)AAOI Applied Optoelectronics, Inc. 102.51 +18.28 (+21.70%)LASR nLIGHT, Inc. 67.69 +11.50 (+20.47%)Top losersTPB Turning Point Brands, Inc. 108.51 -28.48 (-20.79%)AES The AES Corporation 14.21 -3.07 (-17.77%)AVAV AeroVironment, Inc. 208.32 -43.93 (-17.42%)ELF e.l.f. 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