US stock market futures tumble, crude oil jumps 4% as US-Iran war escalates further

The US stock market futures showed weakness on Monday morning after the US-Iran war in the Middle East intensified over the weekend. The United States attacked Iran with a barrage of heavy weapons at key strategic locations. The attacks killed the Supreme Leader of Iran, Ayatollah Khamenei and several other commanders. In retaliation, Iran launched massive attacks on the US bases in Bahrain, Kuwait, Dubai and the UAE.

Following the massive escalation in the situation, the Dow Jones futures fell over 217 points on Monday morning. The crude oil prices opened over 10% higher, but later gave up the majority of the gains to trade 3.5% higher at 7:11 am. The Brent crude oil prices traded at $76.11 per barrel, and WTI crude oil prices traded at $69 per barrel, giving up the majority of the gains.

On the other hand, the gold and silver prices advanced by little over 1% on Monday morning, cooling off the worries arising out of the Middle East war.

The US dollar index jumped 0.5% to 98 after investors sought to trim their bets on equities and reallocate to safe bets like treasuries and precious metals.

The US markets ended in red on Friday following the release of a Labour Department report showing producer prices in the U.S. increased by more than expected in the month of January. Dow Jones Industrial Average slipped 521 points or 1.05% to 48,977, Nasdaq decreased 210.17 points or 0.92% to 22,668, and S&P 500 fell 29.98 points or 0.43% to 6,878.

The report said the Labour Department's producer price index for final demand climbed by 0.5% in January after rising by a downwardly revised 0.4% in December. The bigger-than-expected monthly increase in producer prices, along with concerns about AI-related layoffs have led to worries about a period of stagflation.

On the sectoral front, Airline stocks showed a substantial move to the downside on the day, resulting in a 5.0% nosedive by the the NSYE Arca Airline Index. The index ended the session at its lowest closing level in almost a month. Software and semiconductor stocks also saw notable weakness, while pharmaceutical, retail and telecom stocks showed strong moves to the upside.