Middle East Tensions Spark 2% Nasdaq Futures Drop, Oil Jumps 6%

On Friday, international stock markets experienced a significant decline, with U.S. stock futures leading the way down. This market reaction came in response to Israel's military strikes on Iran, which sent oil prices surging and prompted investors to flock to safe-haven assets such as gold and the Swiss franc.

The escalating tensions in the Middle East have raised concerns about a new round of heightened risks, compounded by the ongoing pressure from U.S. President Trump's trade policies on the global economy and financial markets. The market responded swiftly, with U.S. stock index futures continuing to fall. The tech-heavy Nasdaq index futures saw a drop of over 2%, while the S&P 500 index futures declined by 1.8%, and the Dow Jones Industrial Average futures fell by 1.6%. In Asia, Japan's Nikkei index dropped by 1.4%, and South Korea's KOSPI index decreased by 1.2%.

Brent crude oil prices jumped by more than 6%, reaching $73.56 per barrel, while spot gold prices rose by 1%, reaching approximately $3,419 per ounce. Following the strikes, Israel declared a state of emergency nationwide to prepare for anticipated missile and drone attacks from Iran. Two unnamed U.S. officials confirmed that Israel had initiated strikes on Iran, but clarified that the U.S. was not involved in or supportive of the operation. Meanwhile, President Trump was reported to be holding a cabinet meeting.

Market analysts noted that traders were quickly moving into safe-haven assets in response to reports of strikes on Iran. However, details about the scale and impact of the strikes remained limited, and market movements were relatively contained. The ongoing tensions in the Middle East have been exacerbated by the stalled efforts to reach a nuclear agreement between the U.S. and Iran. Officials from both countries, along with mediators from Oman, had planned to hold a sixth round of talks on Iran's uranium enrichment program on Sunday.