Daijiworld Media Network - New York
New York, Mar 3: US stock index futures tumbled sharply on Tuesday as escalating tensions in the Middle East rattled investor sentiment and raised concerns that surging energy prices could stoke inflation and slow global growth.
At 05:50 ET (10:50 GMT), Dow Jones Futures fell 815 points or 1.7 per cent, S&P 500 Futures dropped 120 points or 1.7 per cent, and Nasdaq 100 Futures slid 570 points or 2.3 per cent.
The sell-off followed renewed fears that the conflict between the United States, Israel and Iran is widening. A US embassy in Riyadh was reportedly hit by Iranian drones, while strikes were also reported near key installations in the UAE and Bahrain.
The U.S. State Department on Tuesday ordered the departure of non-emergency personnel and family members from Bahrain, Iraq and Jordan amid the deteriorating security situation.
The United States and Israel launched airstrikes on Tehran over the weekend, killing Iran’s Supreme Leader Ali Khamenei. In response, Iran and its proxy Hezbollah retaliated with attacks across the region.
US President Donald Trump, speaking at a public event, said the US was “substantially ahead of time projections” in its military operations and added that the country had a “virtually unlimited” supply of certain weapons.
Oil prices extended gains amid concerns over potential disruptions to shipments through the Strait of Hormuz, a critical route for global crude exports.
Brent crude futures jumped 7.3 per cent to $83.37 per barrel, while US West Texas Intermediate crude rose 7.2 per cent to $76.35 per barrel. Both benchmarks had already closed more than 7 per cent higher on Monday after touching one-year highs.
Analysts warned that sustained high oil prices could trigger a supply-side shock, lifting inflation and dampening economic growth. ANZ analysts said the duration of the conflict would determine the extent of economic fallout.
Rising energy costs have reinforced expectations that the US Federal Reserve may delay interest rate cuts. Federal Reserve policymakers John Williams, Jeffrey Schmid and Neel Kashkari are scheduled to speak later in the day.
On the corporate front, retail giant Target Corporation is set to report quarterly results, offering insights into US consumer spending trends. Cybersecurity firm CrowdStrike will also release earnings.
Investors are bracing for key US economic data later this week, including retail sales, ADP employment figures and the closely watched nonfarm payrolls report.
While US manufacturing data released on Monday showed stronger-than-expected growth, input prices were already rising in February — even before the potential energy shock from the Middle East conflict — adding to inflationary concerns.