The escalating war in the Middle East is likely to send US stock markets plummeting on Tuesday. The futures on the major stock indices fall by up to 2.5 percent premarket. While Wall Street reacted quite calmly to the attacks on Iran by the USA and Israel as well as the Iranian retaliatory strikes on Monday, nervousness is now spreading. Fear of inflation is added to the fear of war. Because oil prices continue their rapid rise. Iran has threatened to destroy energy infrastructure and “burn” ships passing through the Strait of Hormuz – a key transport route for oil. Investors fear that rising oil prices will drive up inflation and prevent the Federal Reserve from expanding its policy for a longer period of time monetary policy to loosen up. Prices for Brent and WTI oil are currently rising by up to 7.8 percent.
Dwindling hopes of lowering interest rates continue to drive yields higher on the US bond market. The yield on ten-year securities rose by 5 basis points to 4.10 percent. As of early Monday, the ten-year yield was still below 4 percent. Yields on German federal bonds are also rising sharply. The price development on the bond market shows that federal and US bonds no longer act as “safe havens,” said Christoph Rieger from Commerzbank.
The dollar continues to appreciate. The dollar index rose by 0.8 percent. The euro falls below the $1.16 mark.
Gold gives initial gains. The price of a troy ounce fell by 1.3 percent. The stronger dollar is likely to have a negative impact here, making the precious metal more expensive for buyers from outside the dollar area.
Important US economic data is not due to be published on Tuesday. Company news is also rare. Among the individual sectors, oil stocks are likely to follow the price of oil higher. Exxon Mobil gained 1.8 percent and Chevron 1.6 percent in the premarket. Other beneficiaries could be defense stocks such as Northroop Grumman (+0.7%) or RTX (+1.1%). Shares in airlines and the tourism industry are likely to be under pressure again. American Airlines fell 4 percent, Delta Air Lines fell 3.7 percent and United Airlines fell 4.1 percent. The shares of the cruise operator Carnival fell by 5 percent.
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(END) Dow Jones Newswires
March 03, 2026 06:18 ET (11:18 GMT)
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