- US stock futures recover after an initial dip due to US airstrikes on Iranian nuclear facilities.
- Oil prices fluctuate as fears of a supply shock subside despite Iran’s threat to close the Strait of Hormuz.
- Investors shift focus to earnings and inflation outlook, showing confidence in limited geopolitical fallout.
Global markets regained their footing on Monday, with US stock futures climbing into positive territory after an early slump sparked by the US military’s strike on Iranian nuclear sites.
Amid heightened geopolitical risk, Brent crude oil briefly surged over 5% before falling back below $78 per barrel, indicating that traders expect only limited disruption to oil shipments.
Stocks Rebound After US-Iran Clash as Markets Downplay Oil Shock Risk
Following a weekend of unexpected military escalation, markets were initially rattled by news that the US had targeted Iran’s nuclear infrastructure. However, reassurances from the Trump administration—indicating no further action unless provoked—calmed investor nerves. Traders interpreted the response as symbolic rather than strategic, focusing instead on its limited scope.
In India, domestic indices reflected global jitters with the Sensex shedding over 500 points and the Nifty slipping below the 25,000 mark. Yet certain sectors, particularly capital goods and metals, saw selective buying. IT stocks like Infosys and TCS underperformed, dragged down further by Accenture’s weak earnings, raising concerns about global tech spending.
Oil remains the wildcard. Although Iranian lawmakers have pushed for closing the Strait of Hormuz, the decision awaits approval from the National Security Council. This vital waterway channels nearly a fifth of global oil—any disruption could trigger a significant inflationary wave and shift central bank priorities globally.
Investor focus is now pivoting toward corporate earnings and economic data releases later this week. With US Treasury yields dipping slightly and the dollar firming up, markets are recalibrating for the possibility of a brief but non-escalating Middle East event. This cautious optimism is helping temper volatility, at least in the short term.
Despite rising tensions in the Middle East, global markets appear to be betting on restraint, treating the US-Iran confrontation as a sharp but contained geopolitical flare-up.
“In investing, what is comfortable is rarely profitable.” — Robert Arnott
