Markets Stumble Midday as Iran Fires Missiles at U.S. Base, Oil Slips Despite Rising Tensions

U.S. stocks held near session lows Monday afternoon as a missile strike by Iran on a U.S. air base in Qatar rattled investors and reignited fears of regional escalation in the Middle East. Despite the renewed tension, oil prices reversed earlier gains and turned lower, suggesting markets remain skeptical of a full-scale disruption to global crude supply.

At 12:51 p.m. ET, the Dow Jones Industrial Average was down 60.01 points, or 0.14%, to 42,146.80. The Nasdaq Composite edged 3.42 points lower, or 0.02%, to 19,444.00, and the S&P 500 hovered just below flat, off 0.03 points at 5,967.81, according to Finviz. The Russell 2000 lagged, falling 1.29 points, or 0.61%, to 207.93.

Meanwhile, West Texas Intermediate crude for August delivery dropped $0.58, or 0.79%, to $73.26 per barrel as of 12:39 p.m. ET, according to Yahoo Finance.

🎥 WATCH: The $37 Trillion Lie — Rick Rule Exposes What They’re Not Telling You

Iran Launches Missiles, Trump Responds Online

The selloff followed reports from Iranian state-affiliated Tasnim News Agency that Tehran had launched a missile strike on a U.S. military installation in Qatar—marking a significant escalation just days after American forces targeted Iranian nuclear sites.

In a Truth Social post at 11:27 a.m., President Donald Trump responded with characteristic defiance, to the unfolding geopolitical fall out referencing the success of recent U.S. strikes and boasting about America’s military capabilities.

“Our Nuclear Submarines… just launched the 30 Tomahawks — All 30 hit their mark perfectly,” Trump wrote. “In addition to our Great Fighter Pilots, thank you to the Captain and Crew!”

Trump’s remarks also called out Russia’s Dmitry Medvedev for allegedly threatening to supply nuclear warheads to Iran, demanding immediate verification and stating that the “N word should not be treated so casually.”

The post came amid rising fears of an expanded conflict involving multiple regional powers and potential threats to global oil transit through the Strait of Hormuz.

Crude Retreats Despite Geopolitical Shock

Despite the missile attack and mounting rhetoric, oil markets failed to sustain their early gains. Crude initially spiked above $76 following the U.S. strikes over the weekend, but prices have since retreated as traders reassess the likelihood of significant supply disruptions.

Energy analysts say the market may be pricing in the assumption that Iran’s retaliatory capacity is limited and that the Strait of Hormuz—through which 20% of the world’s oil flows—remains open.

“Even a partial disruption could send Brent crude soaring above $150,” warned Samuel Reed in a midday commentary for Ainvest, but he acknowledged that a full closure is still considered unlikely.

The International Energy Agency has said that 1.2 billion barrels of emergency reserves remain on standby, but such buffers are insufficient if sustained disruption occurs.

Traders Eye Defense, Energy Plays

With volatility mounting, investors are rotating toward defense and energy infrastructure stocks. ETFs tracking the aerospace and defense sectors, such as PRWF and ITAY, are drawing interest, along with oil and gas logistics firms like Kinder Morgan and Western Midstream Partners.

Market participants are also watching volatility instruments and cybersecurity stocks as geopolitical risks rise. “No portfolio is complete without safeguards,” Reed wrote, citing the VXX volatility ETF and names like Palo Alto Networks and CrowdStrike as potential hedges.

Outlook: Oil on a Knife’s Edge, Markets Brace for Fallout

The balance between escalation and containment will likely define market sentiment in the days ahead. For now, the retreat in oil prices and muted equity response suggest that investors still view the risk of a broader regional war as constrained.

But as Iran-U.S. tensions evolve and more information emerges on potential U.S. casualties or infrastructure damage, volatility is likely to remain elevated. Traders are bracing for headlines—and for a market that may swing as sharply as the Tomahawks flying overhead.