Global Stocks Drop, Oil Futures Spike on Israel-Iran Conflict

Global stocks are falling and oil prices are spiking Friday as Israel’s attacks on Iran’s nuclear program and military leadership sparked worries of a broader Middle East conflict and drove investors into safe-haven assets.

Iran reportedly has launched more than a hundred drones in response. Secretary of State Marco Rubio distanced the U.S. from the attacks and warned Iran not to target American forces.

“Tonight, Israel took unilateral action against Iran. We are not involved in strikes against Iran and our top priority is protecting American forces in the region,” Rubio said in a post on X. “Israel advised us that they believe this action was necessary for its self-defense. President Trump and the Administration have taken all necessary steps to protect our forces and remain in close contact with our regional partners. Let me be clear: Iran should not target U.S. interests or personnel.”

U.S. stock futures are dropping, with Dow Jones Industrial Average and Nasdaq futures 1.1% lower, and S&P 500 futures down 1.4%. The Stoxx Europe 600 index is almost 1% lower, while Japan’s Nikkei and Hong Kong’s Hang Seng, where the biggest Chinese companies are listed, finished down 0.9% and 0.6%, respectively.

Oil prices jumped more than 6% and the 10-year Treasury yield fell to 4.35%, while the flight from risk drove safe-haven gold up more than 1% to around $3,440 per troy ounce level. The U.S. dollar, which hit a three-year-low Thursday, gained ground against the euro, pound, and yen. 

“The developments could provide a timely test of the US dollar’s traditional safe haven appeal after it hit fresh year to date lows yesterday prior to Israel’s military strikes,” MUFG senior currency analyst Lee Hardman wrote.