The global stock market experienced significant volatility this week due to Israel's large-scale airstrikes against Iran's military and nuclear facilities, leading to a sharp rise in oil prices, with energy and defense stocks performing strongly. However, widespread geopolitical uncertainty weighed down overall market performance, putting pressure on travel and airline stocks. The following is a comprehensive analysis report, purely market observation, not any investment advice.
Middle East tensions trigger oil price surge
This week, oil prices surged nearly 13%, marking the largest weekly increase since October 2022. West Texas Intermediate (NYSE symbol WTI) futures briefly soared to $77.50 per barrel, ultimately retreating to about $73, still rising over 7% compared to the previous day's closing price. Meanwhile, US gasoline futures also rose 4%, reaching $2.21 per gallon, the largest weekly increase in three months.
This wave of gains stems from Israel's airstrikes on Iranian infrastructure, resulting in the deaths of high-ranking officials, causing market concerns over potential Iranian retaliation. Traders are highly focused on supply risks in the region, especially since one-third of the world's crude oil passes through the strategic waterway of the Strait of Hormuz.
ING: Oil prices could surge to $120, worst case could touch $150
Warren Patterson, Head of Commodity Strategy at ING, stated that if there is a severe disruption in the Strait of Hormuz, up to 14 million barrels of oil supply could be threatened globally each day, and oil prices could potentially surpass $120 per barrel. He further pointed out that if the supply disruption continues until the end of the year, Brent crude could even challenge the historical high of nearly $150. Iran currently produces 3.3 million barrels of oil per day, with about 1.7 million barrels being exported, making this military conflict particularly sensitive, and Wall Street analysts are closely monitoring the news.
The three major US stock indices fell
Escalating geopolitical risks have led to increased market risk aversion, with the three major US stock indices generally declining on Friday.
S&P 500 index fell 0.9%
Dow Jones Industrial Average fell 1%
NASDAQ 100 index fell 1.1%
Energy and defense-related stocks rose against the trend
Energy stocks:
Occidental Petroleum (NYSE symbol OXY) rose 4.8%
APA Corp (NASDAQ symbol APA) rose 4.76%
Diamondback Energy Inc (NASDAQ symbol FANG) rose 4.68%
Halliburton Co (NYSE symbol Halliburton) and Schlumberger NV (NYSE symbol SLB) both rose over 4%
Defense stocks:
Northrop Grumman Corp (NYSE symbol NOC) rose 3.94%
Lockheed Martin Corp (NYSE symbol LMT) rose 3.1%
RTX Corp (NYSE symbol RTX) rose 4%
Travel and airline industry hit hard
Under the dual pressure of soaring oil prices and unclear Middle East situations, travel and airline stocks have significantly declined.
Carnival Corp (NYSE symbol CCL) fell 5.24%
United Airlines (NASDAQ symbol UAL) fell 4.82%
Delta Air Lines (NYSE symbol DAL) fell 4.58%
Analysts note that the surge in oil prices may spread to other US stock markets; if the situation in the Middle East continues to deteriorate, investors should remain vigilant. With rising oil prices and heightened supply risks, energy and defense stocks are showing resilience, becoming the market focus. In the coming weeks, the market will closely watch whether Iran will retaliate and whether the US or other major powers will further intervene.
This article on the escalation of Middle East conflicts and soaring oil prices impacting US stocks, with energy and defense stocks rising and travel stocks falling, first appeared in Chain News ABMedia.