U.S. equity futures pointed to steep losses after large-scale airstrikes carried out by the United States and Israel against Iran heightened fears of a broader regional conflict. The escalation pushed oil prices sharply higher and triggered a flight from risk assets toward traditional safe havens such as gold. Asian equities also declined, pressured by uncertainty surrounding artificial intelligence developments and their implications for the technology sector.
Futures slide
U.S. stock futures dropped sharply on Monday as investors assessed the potential fallout from the joint U.S.-Israeli strikes on Iran and the risk that tensions could spread across the wider Middle East.
As of 02:54 ET, Dow futures were down 733 points, or 1.5%, S&P 500 futures had fallen 104 points, also 1.5%, and Nasdaq 100 futures declined 463 points, or 1.9%.
The coordinated strikes on Saturday targeted multiple locations across Iran and reportedly killed several senior Iranian officials, including Supreme Leader Ayatollah Ali Khamenei. U.S. President Donald Trump has called on Iranian opposition groups to overthrow the country’s long-standing governing system, although many senior U.S. officials remain doubtful that regime change is imminent, according to Reuters.
Questions persist over how long Washington intends to remain engaged militarily. Trump told the New York Times that operations could continue for “four to five weeks.” He declined to outline a specific transition plan for Iran, stating he has “three very good choices” to lead the country but “won’t be revealing them now,” the New York Times reported.
Iran responded with retaliatory strikes targeting locations across the Middle East, including energy-producing Gulf states. Media reports citing U.S. Central Command said three American service members were killed and five seriously injured, while Trump warned that additional casualties could occur.
Signs of widening hostilities emerged as Israel struck Hezbollah targets in Lebanon, and the Wall Street Journal reported that at least one U.S. aircraft had been shot down in Kuwait.
Oil prices jump on supply fears
Oil markets rallied sharply following the escalation, amid concerns that Iran could attempt to block the Strait of Hormuz — a vital shipping route responsible for roughly one-fifth of global oil supply and about 20% of worldwide liquefied natural gas flows.
By 03:24 ET, Brent crude futures had risen 10% to $80.14 per barrel, while U.S. West Texas Intermediate crude futures gained 9.3% to $73.26 per barrel.
Although Tehran has not formally closed the strait, Reuters reported that shipping data shows tankers beginning to accumulate on both sides as operators grow wary of potential attacks or face difficulties securing insurance coverage.
A sustained rise in oil prices could pose risks to the global economy by reigniting inflation pressures and weighing on consumer demand. If the conflict continues, prices for fuel, electricity and other energy-linked goods could increase further.
“How sustained any spikes are depends on how long attacks persist,” analysts at ING said in a note to clients.
“While it is still very early days and the situation is developing at a fast pace, it does not appear that this military action will be quick and short-lived,” like previous U.S.-Israeli attacks on Iran last year, they added.
Some analysts cited by the New York Times noted that, despite the surge, oil prices remain within historical ranges. A prolonged global supply surplus is expected to partially offset price pressures, supported further by OPEC+ plans announced Sunday to modestly increase production next month.
Gold rallies as investors seek safety
Gold prices climbed as investors moved capital into safe-haven assets during the escalation.
Spot gold rose 2.3% to $5,402.31 per ounce by 03:44 ET, while U.S. gold futures gained 3.3% to $5,418.09.
“A regional spillover or disruption to energy supplies would materially boost gold through higher oil prices, increased inflation expectations and contained real yields,” the ING analysts said.
Beyond geopolitical developments, markets are also preparing for a busy week of economic releases and corporate earnings. The February U.S. jobs report is due alongside results from Broadcom and Target during the first week of March.
Asian equities decline
Asian markets also moved lower, taking cues from Wall Street’s weaker finish on Friday as concerns around artificial intelligence and interest rate expectations weighed on U.S. technology stocks.
Hong Kong’s Hang Seng index and Japan’s Nikkei 225 were among the region’s worst performers, falling 2.1% and 1.4%, respectively.
In addition to geopolitical concerns, technology shares faced selling pressure amid uncertainty over how AI developments may reshape competitive dynamics within the sector. Software companies in particular experienced steep declines in February due to worries about intensified competition from AI-driven tools.
Berkshire Hathaway profit declines
Berkshire Hathaway (NYSE:BRK.B) reported on Saturday that fourth-quarter operating profit fell nearly 30% year on year, largely due to weaker insurance underwriting performance.
In Warren Buffett’s final quarter as chief executive officer, insurance underwriting earnings more than halved to $1.56 billion, while insurance investment income declined nearly 25% to $3.07 billion.
The conglomerate also recorded $4.5 billion in impairment charges related to investments in Kraft Heinz (NASDAQ:KHC) and Occidental Petroleum Corporation (NYSE:OXY).
Operating earnings totaled $10.2 billion for the quarter ended December 31, compared with nearly $14.53 billion a year earlier.
The results included the first shareholder letter written by Greg Abel, Buffett’s chosen successor, who acknowledged that Buffett — long regarded as one of the world’s most influential investors — was “obviously a hard act to follow.”