US stocks plunged Monday morning as oil prices spiked and investor uncertainty shook markets amid US and Israeli air strikes on Iran, while defense stocks like Lockheed Martin jumped.
The Dow Jones Industrial Average fell 311 points, or 0.6%, while the S&P 500 and Nasdaq each sank.
Gold futures rose 1.9% to $5,348.50 as anxious investors rushed to safe-haven assets, and Wall Street’s volatility index jumped to its highest level so far this year.
Joint US and Israeli air strikes over the weekend killed Supreme Leader Ayatollah Ali Khamanei. American officials on Monday confirmed that a fourth US service member had died from injuries sustained in the attacks.
President Trump has warned that the conflict could last “four weeks or so” as the war has broadened to include neighboring countries around Iran.
“Investors trying to assess what to expect in terms of volatility and market response have to make assumptions about the most significant and unknowable factor in this – how long and messy the US involvement with Iran may prove to be,” David Bahnsen, chief investment officer at the Bahnsen Group, wrote in a note Monday.
“Markets do not like uncertainty and there is uncertainty in the air for the time being.”
Follow The Post’s coverage of the United States’ airstrikes on Iran:
US crude prices jumped 7.4% Monday morning as investors worried heightened tensions could disrupt crucial oil shipments, as Iran is the fourth-largest oil producer in OPEC.
Container shipping giants have temporarily suspended operations in the Strait of Hormuz, a vital maritime route located in the gulf between Oman and Iran that saw about 20.9 million barrels of oil transported per day in 2023, according to the US Energy Information Administration.
Defense stocks skyrocketed Monday, a key outlier in the markets following the attacks.
Lockheed Martin rose 3.1%, while Northrop Grumman and RTX each went up 3.2%.
Drone maker AeroVironment surged more than 15%.
ExxonMobil, Chevron and ConocoPhillips also jumped 1.9%, 0.7% and 3.4%, respectively.
But most stocks – especially risky tech assets with AI ties – were dragged down Monday as investors opted for safer bets.
Shares in Broadcom, Amazon and Alphabet fell 2.7%, 1.5% and 2.4%, respectively.
Travel stocks also suffered as the industry saw its largest travel disruption since the pandemic, with thousands of flights cancelled.
United Airlines, American Airlines and Delta fell 3.2%, 4.7% and 1.9%, respectively.
Marriott International, Hilton Hotels, Airbnb, Expedia and Booking Holdings also plummeted 3.2%, 3%, 3.4%, 1.5% and 3%, respectively.
“Investors should not fret one day of market volatility, especially since stock valuations have been elevated for some time now,” Bahnsen wrote on Monday.
“Over the long-term, geopolitical events don’t affect markets, and we’ve been through decades of instances with heightened tensions in the Middle East, and stocks continue to grind higher.”
