United States stock futures dropped on Sunday evening (Monday AEST) after President Donald Trump ordered strikes on three nuclear facilities in Iran.
At 9:35 am AEST (11:35 pm GMT), the Dow Jones Industrial Average and S&P 500 futures each fell 0.3%, while the Nasdaq 100 futures shed 0.5%.
The surprise attacks targeted sites in Fordo, Isfahan and Natanz, catching investors off guard after Trump signalled on Friday that he would decide “within the next two weeks” whether to take military action. The White House had hinted at the possibility of diplomacy, making the sudden offensive a significant escalation.
ANZ analysts commented, “The involvement of the U.S. is a severe escalation of the Israel-Iran conflict. Iran has previously threatened an extreme response should the U.S. join Israel in targeting its nuclear sites.
"Araghchi warned over the weekend that Iran ‘reserves all options to defend its sovereignty, interest and people.’ Markets are likely to be highly volatile as they wait for Iran’s reaction.”
Oil prices, already elevated amid mounting geopolitical risk, surged again on the news. U.S. crude oil futures jumped 2.6% to US$75.73 a barrel on Sunday night, reflecting investor anxiety over potential supply disruptions.
Market focus will now shift to how Iran will respond. Analysts warn the country may retaliate by targeting U.S. forces stationed in the region or by closing the Strait of Hormuz — a critical chokepoint for global energy shipments.
A sustained disruption of traffic through the strait could drive oil prices beyond US$100 per barrel, adding further inflationary pressure to the global economy.
In an interview with Fox News on Sunday, U.S. Secretary of State Marco Rubio urged Beijing to intervene diplomatically, appealing to China — Iran’s largest oil customer — to help prevent the closure of the vital trade corridor.
