Dow, S&P 500, Nasdaq Futures Slide As US-Iran War Shock Sends Oil Soaring: Why INDO, DJT, USO, XOM, CVX Kept Traders On Edge Today

Gold rallied, bonds firmed, and Asian markets declined amid escalating geopolitical tensions in the Middle East, prompting a flight to safe-haven assets.

• U.S. stock futures fell sharply after U.S.-Israeli strikes on Iran escalated into open conflict, triggering oil gains and a shift into safe-haven assets.
• Trump signaled continued military operations, raising fears of a prolonged war and broader regional retaliation.
• Oil surged amid risks to the Strait of Hormuz, a key route for over 20% of global crude flows, reigniting inflation concerns.

U.S. stock futures were sharply lower late Sunday as escalating military conflict in the Middle East drove oil prices higher, sparked a rush into safe-haven assets, and forced investors to reassess inflation and geopolitical risk just as markets were already grappling with AI-driven uncertainty.

As of 7.40 p.m. ET, Nasdaq 100 futures and S&P 500 futures were down by 1.1%, while Dow futures were down 1.2%.

On Stocktwits, retail sentiment toward the SPDR S&P 500 ETF Trust (SPY) was ‘bullish,’ while sentiment toward the Invesco QQQ Trust (QQQ) was ‘neutral,’ and sentiment toward the SPDR Dow Jones Industrial Average ETF Trust (DIA) was ‘extremely bearish,’ with all ETFs under ‘normal’ message volumes.

US Market Drivers

Markets reacted after joint U.S.-Israeli strikes on Iran killed Supreme Leader Ayatollah Ali Khamenei, marking one of the Islamic Republic’s most consequential turning points since 1979 and raising fears of a prolonged regional conflict.

In a video posted Sunday on Truth Social, U.S. President Donald Trump said the U.S. military would continue bombing Iran until its objectives are achieved, warning operations remain ongoing and acknowledging additional American casualties are likely. 

Trump confirmed that U.S. and Israeli forces had struck hundreds of targets across Iran, including Revolutionary Guard facilities and air defences, while calling on Iranian military and police to surrender “for full immunity or face certain death.”

The U.S. military also confirmed its first combat losses in the conflict, with three servicemembers killed and five seriously wounded in an Iranian counterattack. Iran has vowed retaliation, increasing concerns that hostilities could spread across the Middle East and destabilize global shipping routes and energy flows.

Ryan Detrick of Carson Group highlighted on X the tightening market conditions, saying, “Bollinger Bands are about as tight as they've been in years. The spring is coiling.” Bollinger Bands typically measure volatility and identify potential overbought or oversold conditions. 

Oil surged as much as 13% in early trading amid fears that disruptions around the Strait of Hormuz could tighten supplies. The passage handles more than 20% of global oil demand, making it the world’s most critical chokepoint for energy flows. 

Economist Peter Schiff noted on X that the commodity response was already underway, warning that the rise in oil prices "will soon show up big time at the pump and in the CPI."

The geopolitical shock comes on top of an already fragile equity backdrop. The S&P 500 ended February lower after turmoil in AI-linked and software shares prompted concerns about whether rapid automation could undermine traditional business models and employment stability.

The Kobeissi Letter cautioned on X against emotional trading decisions, urging investors to "let the dust settle” as markets attempt to absorb vast uncertainty. They said that the Strait of Hormuz “is the biggest risk to financial markets right now, which will drive broader price action,” noting that prolonged disruption could send oil above $100 per barrel and potentially push U.S. inflation toward 5%.

Trending Stocks To Watch On NYSE, Nasdaq

Energy Stocks (INDO, XOM, BATL, CVX, USO, XLE): Stocks are trending higher as escalating Middle East tensions push oil prices higher and draw investor attention to energy producers and oil-linked ETFs amid supply disruption risks.

DJT: Trump Media shares are trending after Trump posted the Truth Social video confirming ongoing U.S. military operations in Iran and warning the campaign would continue until objectives are met.

LMT: The stock is under retail radar as rising Middle East tensions lifted focus on defence contractors, driving discussion around defence spending and potential contract momentum for major contractors.

How Global Markets Are Performing Today

In broader markets, gold rallied toward $5,350 an ounce as investors moved into traditional safe-haven assets following the geopolitical escalation.

Bond markets showed defensive positioning, with 10-year Treasury futures firming by 3 ticks as yields held below 4% for the first time since late November.

The U.S. Dollar Index strengthened modestly amid increased liquidity demand. Brent crude traded near $79 and U.S. crude near $72 as traders assessed supply risks amid tanker disruptions and uncertainty over Hormuz traffic.

Asian markets opened lower as traders shifted away from risk, with shares declining in Australia and Japan.

Among the catalysts for the day are the S&P final U.S. manufacturing PMI, ISM manufacturing, and Auto sales.

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