Markets Crash as Israel Launches Strikes Against Iranian Nuclear and Military Targets

TLDR

Table of Contents

Israel launched preemptive strikes on Iran’s nuclear program and military targets, prompting global market selloffs
US stock futures dropped 1.3-1.7% while oil prices surged 8% after the attacks on OPEC+’s third-largest producer
Israeli Defense Minister declared state of emergency as PM Netanyahu said strikes would continue until threat removed
US Secretary of State confirmed America was not involved in the unilateral Israeli action
Market analysts warn escalation could push oil above $100 and pressure global growth if Iran retaliates

US stock futures plunged overnight as Israel launched what it called a “preemptive strike” against Iran, targeting nuclear facilities and military sites. The attacks sent shockwaves through global markets as investors fled to safe-haven assets.

Futures tied to the Dow Jones dropped 1.3% while S&P 500 futures fell 1.5%. The tech-heavy Nasdaq 100 futures declined 1.7% as the Middle East conflict escalated.

Explosions erupted across Tehran as Israeli forces struck Iran’s nuclear program. Israeli Prime Minister Benjamin Netanyahu said the strikes would continue “until the threat is removed.”

Israel is currently striking Iran’s capital, Tehran.
Follow: @AFpost pic.twitter.com/YzYr0CneRz
— AF Post (@AFpost) June 13, 2025

Defense Minister Israel Katz declared a state of emergency and described the action as preemptive. He suggested Israel was preparing for potential retaliation from Iran.

Oil prices jumped 8% immediately following the strikes. Iran represents the third-largest oil producer within the OPEC+ alliance, making supply disruptions a key market concern.

Gold prices climbed 1% as investors sought traditional safe-haven assets. The dollar reversed earlier losses as traders moved away from riskier investments.

Market Reaction and Analysis

US Secretary of State Marco Rubio confirmed America was not involved in the Israeli operation. He described it as “unilateral action” and warned Iran against targeting US interests or personnel.

Market strategists expressed concern about potential escalation. Nicolas Forest from Candriam noted the oil price rally could hurt growth and inflation, creating stagflation risks alongside existing tariff pressures.

Kim Forrest from Bokeh Capital Partners called the situation “very serious.” She questioned whether cooler heads would prevail as events continued to unfold overnight.

Matt Maley from Miller Tabak warned about the Strait of Hormuz chokepoint. Iran controls this critical waterway through which 13 million barrels of oil pass daily.

If Iran disrupts shipping through the strait, oil prices could quickly rise above $100 per barrel. This would create pressure on global economic growth.

Broader Market Context

The strikes occurred after US markets had shown resilience despite uncertainty around President Trump’s domestic policies. Trump recently hinted at hiking auto tariffs and called for Federal Reserve rate cuts.

Michael O’Rourke from JonesTrading noted markets had enjoyed a strong rally without major corrections. This leaves equities vulnerable to geopolitical shocks like the Iran strikes.

Alexandre Baradez from IG suggested the conflict could end the current rally in European and US indexes. He expects retail investors to take profits given elevated stock valuations.

The timing comes ahead of key economic data releases. The University of Michigan consumer sentiment survey is due Friday, followed by the Federal Reserve’s interest rate decision next Wednesday.

Analysts expect the Fed to keep rates unchanged at the upcoming meeting. However, geopolitical tensions could complicate monetary policy decisions if oil prices remain elevated.

Wei Liang Chang from DBS warned of knee-jerk market reactions as Middle East risks return. The focus now shifts to Iran’s response and whether the conflict remains contained.

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