S&P 500 To Crash Post Israel Attack On Iran?
TEHRAN, IRAN - JUNE 02: Commander-in-chief of the Islamic Revolutionary Guard Corps, Hossein Salami ... More meets with Iranian President Masoud Pezeshkian in the Iranian capital Tehran on June 2, 2025. It was reported that Hossein Salami was killed during Israel's attacks on Iran. (Photo by Iranian Presidency/Handout/Anadolu via Getty Images)
U.S. stock futures experienced declines following Israel's airstrike on Iran, with S&P 500 futures dropping approximately 1.6%. This immediate market response reflects the index's sensitivity to geopolitical developments that threaten global stability.
The attack prompted Israel's defense minister to declare a special state of emergency, while Iran has vowed retaliation for the strike on its nuclear program. The Wall Street Journal reported that the head of Iran's Islamic Revolutionary Guard was killed in the attack. These escalating tensions have created uncertainty that typically weighs heavily on equity markets. On a separate note, see – Boeing Stock Faces Fresh Crisis After 787 Dreamliner Crash.
The geopolitical crisis has triggered a flight to traditional safe-haven assets. Oil prices surged 9% following the attack, while gold prices also moved higher as investors sought refuge from equity market volatility. This pattern demonstrates how the S&P 500 and broader markets often move inversely to commodities during periods of heightened global tension.
The current situation could echo the market dynamics observed during Russia's invasion of Ukraine in February 2022. Initially, the S&P 500 fell more than 7% in the days and weeks following that conflict's onset, driven by widespread investor fear about geopolitical instability and its economic implications. However, the index demonstrated remarkable resilience. Despite the dramatic initial sell-off, the S&P 500 recovered to pre-invasion levels within a month, even as oil prices remained elevated. This recovery highlighted the market's ability to absorb geopolitical shocks when direct economic exposure remains limited. Also, see the last six market crashes compared.
The S&P 500 is expected to face increased volatility and potential downward pressure in the immediate term. If Iran retaliates and tensions escalate further, the index could experience additional selling pressure as investors remain risk-averse.
However, historical precedent suggests the market's capacity for recovery once initial uncertainty subsides. The S&P 500's track record shows that while geopolitical events create short-term disruption, the index often normalizes as investors assess the actual economic impact versus perceived threats.
The key factor will be whether ongoing tensions in the Middle East remain contained or escalate into a broader regional conflict with more significant global economic implications.
So ask yourself the question: if you want to hold on to your positions, or will you panic and sell if the market falls 2%, or 5%, or see even lower levels?
Holding on to your stocks in a falling market is not always easy. Trefis works with Empirical Asset – a Boston area wealth manager, whose asset allocation strategies yielded positive returns even during the 2008-09 timeframe, when the S&P lost more than 40%.
Empirical has incorporated the Trefis HQ Portfolio in this asset allocation framework to provide clients better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
24 minutes ago
- Yahoo
Momentum stocks that helped drive the market's epic recovery are stalling. Get ready for a ‘buyable' pullback.
After helping to power the U.S. stock market's historic recovery from April's tariff-induced selloff, many of the momentum names popular with individual investors are showing signs of exhaustion. That means investors should approach with caution over the coming weeks. Because another opportunity to buy the dip might lie ahead, according to Jonathan Krinsky, a technical analyst at BTIG. My husband is in hospice care. Friends say his children are lining up for his money. What can I do? These defense stocks offer the best growth prospects, as the Israel-Iran conflict fuels new interest in the sector Walmart's stock looks like it's in trouble. What the chart says may come next. Why bonds aren't acting like a safe haven for investors amid the Israel-Iran conflict My mother-in-law thought the world's richest man needed Apple gift cards. How on Earth could she fall for this scam? 'While it's still too early to say we are getting a more widespread pullback, we are starting to see some early cracks in certain high-beta momentum names today, with many leadership stocks working on potential downside reversals,' Krinsky said in commentary shared with MarketWatch on Thursday. As Krinsky pointed out, Goldman Sachs Group's long-only basket of high-beta momentum stocks appears to have stalled out just shy of its year-to-date peak from February. He identified seven momentum stocks that look particularly vulnerable: GE Aerospace GE, Robinhood Markets Inc., HOOD Lemonade Inc. LMND, Netflix Inc. NFLX, Tesla Inc. TSLA, Twilio Inc. TWLO and Upstart Holdings Inc. UPST. To be sure, only three of these stocks — GE, Tesla and Netflix — are components of the S&P 500. Even if they encounter some near-term turbulence, all of those stocks remain in strong uptrends, Krinsky said. That means any pullbacks would likely prove to be another 'buyable' opportunity. 'To be clear, most of these are in strong primary uptrends, so pullbacks are ultimately buyable,' Krinsky said. 'Tactically, however, we would be cautious of many of these names over the next couple of weeks, especially heading into quarter-end, when big rebalances often take place.' Since skittering to the brink of bear-market territory in early April after President Donald Trump unveiled his 'liberation day' tariff plans, the S&P 500 SPX has staged what could ultimately prove to be its fastest-ever recovery back toward record highs, according to Dow Jones Market Data. The speed of the move has taken many on Wall Street by surprise. By the time Trump announced a 90-day pause on many of the tariffs on April 9, the index had fallen by 18.9% from its February record high to its closing low on April 8. Since then, all seven of the momentum stocks cited by Krinsky have tallied huge gains, with Robinhood up more than 115%, while Lemonade has gained nearly 70%. Even Netflix, the worst performer in the group, has risen by roughly 40%, FactSet data showed. The S&P 500, meanwhile, has risen by 21.3%. Data from several Wall Street banks show retail investors helped power the market's recovery in April, while their professional peers remained much more cautious. The index was still about 1.7 percentage points shy of its Feb. 19 record as of Thursday's close, although it tallied its highest finish since Feb. 20, according to Dow Jones data. U.S. stocks finished higher on Thursday, with the S&P 500, Nasdaq Composite COMP and Dow Jones Industrial Average DJIA all closing in the green. 'He failed in his fiduciary duty': My brother liquidated our mother's 401(k) for her nursing home. He claimed the rest. Gundlach says gold is no longer for lunatics as the bond king says wait to buy the 30-year 'I am getting very frustrated': My mother's adviser has not returned my calls. He manages $1 million. Is this normal? I'm in my 80s and have 2 kids. How do I choose between them to be my executor? 'It might be another Apple or Microsoft': My wife invested $100K in one stock and it exploded 1,500%. Do we sell?
29 minutes ago
How major US stock indexes fared Firday, 6/13/2025
Oil prices leaped, and stocks slumped on worries that escalating violence following Israel's attack on Iranian nuclear and military targets could damage the flow of crude around the world, along with the global economy. The S&P 500 sank 1.1% Friday and wiped out what had been a modest gain for the week. The Dow Jones Industrial Average dropped 769 points, and the Nasdaq composite lost 1.3%. Crude prices jumped roughly 7% because Iran is one of the world's major producers of oil and fighting in the region could disrupt the flow. Treasury yields rose with worries about inflation. On Friday: The S&P 500 fell 68.29 points, or 1.1%, to 5,976.97. The Dow Jones Industrial Average fell 769.83 points, or 1.8%, to 42,197.79. The Nasdaq composite fell 255.66 points, or 1.3%, to 19,406.83. The Russell 2000 index of smaller companies fell 39.59 points, or 1.8%, to 2,100.51. For the week: The S&P 500 is down 23.39 points, or 0.4%. The Dow is down 565.08 points, or 1.3%. The Nasdaq is down 123.13 points, or 0.6%. The Russell 2000 is down 31.74 points, or 1.5%. For the year: The S&P 500 is up 95.34 points, or 1.6%. The Dow is down 346.43 points, or 0.8%. The Nasdaq is up 96.03 points, or 0.5%. The Russell 2000 is down 129.65 points, or 5.8%.
Yahoo
39 minutes ago
- Yahoo
Gold and oil prices have a message for investors about Iran tensions
Tensions between the U.S. and Iran have been rising, but the big moves in gold and oil prices can help gauge just how serious the situation has become — and hint at what's next for global financial markets. 'Gold and oil are two of the most geopolitical-sensitive market barometers we have,' said John Caruso, senior market strategist at RJO Futures. Given that, they are the 'first places I look when geopolitical risks arise in the Middle East.' My husband is in hospice care. Friends say his children are lining up for his money. What can I do? These defense stocks offer the best growth prospects, as the Israel-Iran conflict fuels new interest in the sector Walmart's stock looks like it's in trouble. What the chart says may come next. Why bonds aren't acting like a safe haven for investors amid the Israel-Iran conflict My mother-in-law thought the world's richest man needed Apple gift cards. How on Earth could she fall for this scam? And those risks have certainly been climbing. On Thursday, Iran said it would soon open a third uranium-enrichment site, even as negotiations with the U.S. over a nuclear deal are expected to continue Sunday. President Donald Trump has said he is less confident about reaching a deal with Tehran and that he could take military action against Iran if negotiations fail, according to the Wall Street Journal. Israel appears to be preparing an attack on Iran's nuclear sites, the New York Times reported Wednesday, and fears of potential retaliation across the region by Tehran appeared to prompt the U.S. to withdraw diplomatic personnel from Iraq and authorize the departure of U.S. military family members from the Middle East. What sets this escalation apart from prior flare-ups is that 'it's being taken more seriously by the market — evidenced by the U.S. decision to relocate nonmilitary personnel from the region, which suggests this is more than just rhetorical posturing,' said Rebecca Babin, senior energy trader and managing director at CIBC Private Wealth in New York. 'Israel is more emboldened to act unilaterally,' she told MarketWatch. 'Unlike in previous years, there's a real risk that Israel could strike Iran without direct U.S. support if talks collapse.' Geopolitical risk premium in crude had been 'minimal' until recently, Babin said, with markets having been 'increasingly optimistic that an interim deal would be reached, and analysts had started softening [oil] balance forecasts under the assumption that Iranian exports might remain stable.' At the same time, crude sentiment has remained 'deeply bearish,' with many investors short oil as a 'broader play on weakening global demand,' Babin added. 'This combination of low embedded risk premium and high geopolitical uncertainty creates a fragile setup where even modest escalation could cause outsized market reactions.' Against that backdrop, prices for both gold and oil have been making some big moves. On Thursday, the August gold contract GCQ25 GC00 gained $58.70, or 1.8%, to settle at $3,402.40 an ounce on Comex, nearing the record settlement for a front-month contract of $3,425.30 from April 21, according to Dow Jones Market Data. Oil, meanwhile, saw U.S. benchmark West Texas Intermediate crude for July delivery CLN25 CL.1 edge down by 11 cents, or 0.2%, to settle at $68.04 a barrel on the New York Mercantile Exchange on Thursday, after a 4.9% rise on Wednesday. Global benchmark Brent crude for August delivery BRNQ25 BRN00 lost 41 cents, or 0.6%, to end at $69.36 on ICE Futures Europe, a day after climbing 4.3%. In energy markets, the developments tied to Iran were priced in almost immediately, said Ahmad Assiri, research strategist at Pepperstone, in a recent note, with Brent crude climbing Wednesday from its 50-day moving average near $66 a barrel. Traders are concerned about the risk of oil supply disruptions through the Strait of Hormuz, he said. That's the world's most important oil transit chokepoint, with 20.9 million barrels per day of crude oil and petroleum liquids transported through the strait in 2023, according to the U.S. Energy Information Administration. 'The geopolitical premium remains pronounced,' said Assiri. Brent prices eased back Thursday, but only modestly from Wednesday's rise, and prices are 'undeterred by broader headwinds such as trade tariffs and their dampening effect on global growth, or OPEC+ production increases led by Saudi Arabia, which appears intent on boosting market share,' he said. 'Taken together, these factors signal genuine concern over a potential resurgence of instability in the Middle East,' Assiri said. 'Geopolitical risk has been vaulted back to the forefront after a period of relative easing following earlier positive developments in the region.' For oil, future performance hinges on two primary drivers, he noted. First, the 'inherently unpredictable geopolitical dynamic, now leveraged as a bargaining chip by the U.S. administration, demands close monitoring since shift in diplomatic posture or regional tensions could alter the supply outlook,' said Assiri. The economic backdrop is the second primary driver, as oil demand appears stronger than anticipated a month ago, 'supported by ongoing signals of global growth and only muted inflationary impact from tariffs,' he said. The direct effects of tariffs on inflation have so far been limited, 'reducing the odds of a recession scenario relative to prior forecasts,' he added — underpinning continued growth in oil demand that outstrips consensus expectations. Overall, the 'interplay' between geopolitical maneuvering and underlying demand strength suggests that oil-market dynamics will remain 'prone to swings and traders should factor in the likelihood of volatility tied to shifts in regional risk,' said Assiri. For gold, of course, it's a 'flight-to-safety trade,' RJO Futures' Caruso said. If there is 'military action [instead of] diplomacy' on Iran, then gold, as well as oil, could go much higher. Geopolitical concerns are tailwinds for gold, along with falling Treasury yields BX:TMUBMUSD10Y and a sharp drop in the U.S. dollar DXY, said Michael Armbruster, co-founder and managing partner at futures brokerage Altavest. He warned, however, that Middle East tensions have a tendency to 'come and go quickly, and if that happens again, gold's spike may be short-lived.' Armbruster said he 'would not buy gold just because of Iran.' The Middle East is a 'nice narrative for gold, but investors are likely to buy at tops if they are chasing headlines,' he noted. Altavest believes a better buying opportunity could emerge in gold in the coming weeks, he added, as data forecast a 'reflationary environment' in June — with reflation equaling a reacceleration in growth and inflation. Long term, Armbruster said the firm is still bullish on gold and is 'simply on the lookout for a dip for our clients to add to their long gold position.' Taking a look at the bigger picture, Caruso said he's not seeing much of a 'risk-off' play in the markets at this point — but if the U.S.-Iran dispute escalates, 'we'll surely see the risk-off, safe-haven trade in effect.' 'He failed in his fiduciary duty': My brother liquidated our mother's 401(k) for her nursing home. He claimed the rest. Gundlach says gold is no longer for lunatics as the bond king says wait to buy the 30-year 'I am getting very frustrated': My mother's adviser has not returned my calls. He manages $1 million. Is this normal? I'm in my 80s and have 2 kids. How do I choose between them to be my executor? 'It might be another Apple or Microsoft': My wife invested $100K in one stock and it exploded 1,500%. Do we sell? Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
