U.S. stock futures fall after strikes on Iran, oil climbs

U.S. markets were shaken immediately after Washington launched strikes against Iran, sending stock futures lower and crude oil higher as investors priced in the risk that the fighting could spread beyond a single exchange of fire. S&P 500 futures fell 0.50%, Nasdaq 100 futures dropped 0.87% and Dow futures lost 140 points, or 0.28%, after the latest escalation tied to the downing of a U.S. Army Apache helicopter.

The military clash was not isolated. U.S. forces hit Iranian air-defense systems, ground-control stations and surveillance radar sites near the Strait of Hormuz, while Iran responded by targeting Bahrain, Kuwait and Jordan. Jordan’s military said it intercepted five Iranian missiles, Bahrain sounded alarms and Kuwait activated air defenses. The confrontation also threatened a ceasefire that remained nominally active despite repeated outbreaks of fighting.

Oil traders reacted first. Brent crude rose 0.7% to $92.08 a barrel and West Texas Intermediate gained 0.6% to $88.73, extending a move that has already pushed Brent up more than 55% since the war began. At one point, Brent had come close to $120 a barrel, and March ranked among the largest monthly oil price jumps on record. That matters far beyond energy desks: every sustained move higher in crude raises the odds of more expensive gasoline, stickier inflation and a tougher backdrop for households already squeezed by high borrowing costs.

The broader market message was just as stark in Asia, where MSCI’s Asia-Pacific index outside Japan fell about 3%, Japan’s Nikkei dropped 2% and South Korea’s KOSPI slumped nearly 7%. The selloff showed how quickly geopolitical risk can overwhelm the artificial-intelligence-driven rebound that had recently lifted tech shares and emerging markets. For investors, the immediate damage was visible in futures and oil; the larger concern is whether the fighting disrupts shipping and energy flows through the Strait of Hormuz, a chokepoint that can ripple through global prices.

The macro backdrop made the shock more dangerous. U.S. inflation data for May was scheduled for release later Wednesday at 8:30 a.m. ET, with a Reuters survey projecting consumer prices up 4.2% from a year earlier, the biggest annual increase since April 2023. That combination of geopolitical stress and inflation risk leaves retirement accounts and pension portfolios vulnerable to another swing in rates, earnings expectations and energy costs. For now, markets know the strikes hit specific Iranian targets; what they are trading is the chance that the conflict widens and keeps oil, inflation and volatility elevated.