The S&P 500 futures are up 0.32%, while the tech-heavy Nasdaq 100 futures have gained 0.36%. The Dow Jones Industrial Average futures are also showing resilience, rising 0.17%. This morning's rebound comes after a brutal Tuesday where the Dow Jones Industrial Average lost 403.51 points, or 0.83%, and ended at 48,501.27. The S&P 500 slipped 0.94% to close at 6,816.63, while the Nasdaq Composite shed 1.02% to settle at 22,516.69.
US crude oil prices rose 5.9% Tuesday to $75.40 per barrel after rising 6.3% on Monday, and gas shot 11 cents higher to $3.11 a gallon. Brent crude, the international oil benchmark, gained 5.8%, to $82.14 per barrel, its highest level since July 2024. The energy sector continues to be the main story as markets digest the fallout from recent U.S.-Iranian military strikes that began late February. The global oil market is facing a worst-case scenario as the U.S. war with Iran engulfs the Middle East with no clear off ramp, increasing the risk of a prolonged supply disruption that could slow the global economy.
The real question for investors: how long does this last? Goldman Sachs CEO David Solomon said he thinks the market reaction has been more benign than expected, adding that "I think it's going to take a couple of weeks for markets to really digest the implications of what's happened." While geopolitical conflict can whip up uncertainty, investors remain focused on market fundamentals that are largely unaffected so far. "We know that usually when there's conflict around the world, it doesn't go on to materially impact the direction of US corporate profits, which are obviously the lifeblood of the equity market," said David Stubbs, chief investment strategist at AlphaCore Wealth Advisory. Traders are cautiously optimistic that the disruption stays contained, though tanker traffic through the Strait of Hormuz, the world's most important chokepoint for oil shipments, has come to a standstill as ship owners take precautionary measures.