US stock futures declined following remarks by Defense Secretary Pete Hegseth, who announced intensified military operations against Iran, targeting its navy and defense infrastructure. The US also reiterated its stance on protecting shipping through the Strait of Hormuz, while Iran's Supreme National Security Council emphasized a dual message of peace and resistance. Oil prices fell to .85 per barrel despite earlier volatility, reflecting market uncertainty about the conflict's duration and economic impact. The military escalation raises concerns about regional instability and its spillover effects on global markets. Traders are closely monitoring whether the US will pursue a limited campaign or escalate further, which could drive oil prices higher if Iran retaliates. The market's mixed reaction—falling equities but lower oil prices—highlights conflicting risks between geopolitical tensions and economic growth fears. For investors, the key focus is on how the US administration balances military actions with economic stability. If Iran de-escalates, oil prices may stabilize, but prolonged conflict could reignite inflation. MENA investors should watch for shifts in US-Iran dynamics and their impact on energy markets, particularly given the region's exposure to oil price fluctuations.

Read full article from source ↗