Concerns About Middle East War May Weigh On Wall Street

The major U.S. index futures are currently pointing to a lower open on Thursday, with stocks likely to see further downside after coming under considerable pressure over the course of the previous session.

Concerns about the escalation of the war in the Middle East may weigh on Wall Street following attacks on critical energy infrastructure across the region.

Israel bombed Iran’s South Pars natural gas fields and oil facilities in Asaluyeh, while an Iranian missile attack on Qatar’s Ras Laffan energy complex caused “extensive damage,” according to the country’s state-run energy firm.

President Donald Trump threatened in a post on Truth Social to “massively blow up the entirety of the South Pars Gas Field at an amount of strength and power that Iran has never seen or witnessed before” if there are further attacks on Qatar.

After soaring to nearly $120 a barrel following the latest attacks, Brent crude oil futures have given back some ground but remain above $113 a barrel.

Stocks moved sharply lower over the course of the trading day on Wednesday, largely offsetting the upward move seen over the two previous sessions. The major averages all showed significant moves to the downside, with the Dow and the S&P 500 dropping to nearly four-month lows.

The major averages ended the day just off their lows of the session. The Dow plunged 768.11 points or 1.6 percent to 46,225.15, the Nasdaq tumbled 327.11 points or 1.5 percent to 22,152.42 and the S&P 500 slumped 91.39 points or 1.4 percent to 6,624.70.

Following an early pullback, stocks saw further downside in late-day trading amid a negative reaction to Federal Reserve Chair Jerome Powell’s comments after the central bank announced its widely expected decision to leave interest rates unchanged.

In his post-meeting press conference, Powell said the U.S. is seeing “some progress on inflation” but “not as much as we had hoped.”

While Fed officials’ latest projections predict a quarter point rate cut this year, Powell warned that “you won’t see the rate cut” if there isn’t further progress on inflation.

Powell also said the Fed is facing a situation where “the risks to the labor market are to the downside, which would call for lower rates, and the risks to inflation are to the upside, which would call for higher rates or not cutting anyway.”

The Fed chief’s remarks came after the central bank announced its decision to maintain the target range for the federal funds rate at 3.50 to 3.75 percent after also leaving rates unchanged after its last meeting in January.

Most Fed officials voted in favor of keeping rates unchanged, although Fed Governor Stephen I. Miran continued to prefer cutting rates by a quarter point.

The weakness seen earlier in the day came following the release of a Labor Department report showing producer prices in the U.S. increased by much more than expected in the month of February.

The Labor Department said its producer price index for final demand advanced by 0.7 percent in February after climbing by 0.5 percent in January. Economists had expected producer prices to rise by 0.3 percent.

The report also said the annual rate of growth by producer prices accelerated to 3.4 percent in February from 2.9 percent in January. Yearly growth was expected to remain unchanged.

Along with the recent spike in crude oil prices due to the Middle East war, the data added to recent concerns about the outlook for inflation.

Gold stocks showed a substantial move to the downside amid a steep drop by the price of the precious metal, with the NYSE Arca Gold Bugs Index plummeting by 6.4 percent to a two-month closing low.

Significant weakness was also visible among airline stocks, as reflected by the 3.0 percent plunge by the NYSE Arca Airline Index.

Telecom stocks also saw considerable weakness on the day, dragging the NYSE Arca North American Telecom Index down by 2.7 percent.

Housing, retail and pharmaceutical also showed notable moves to the downside, moving lower along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are rising $0.23 to $96.55 a barrel after inching up $0.11 to $96.32 barrel on Wednesday. Meanwhile, after tumbling $112 to $4,896.20 an ounce in the previous session, gold futures are plummeting $283.60 to $4,612.60 an ounce.

On the currency front, the U.S. dollar is trading at 158.99 yen versus the 159.86 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1485 compared to yesterday’s $1.1450.

Asia

Asian stocks nosedived on Thursday as rising oil prices following attacks on key energy infrastructure in the Middle East rekindled concerns about inflation, interest rates and the regional growth outlook.

Brent crude price spiked more than 6 percent above $114 a barrel after Israel attacked upstream energy assets in Iran and the latter vowed retaliation, escalating attacks on Gulf energy infrastructure. Missile strikes damaged Qatar’s Ras Laffan hub, disrupting LNG and helium supply.

Washington “knew nothing” of Israel’s earlier attack on Iran’s South Pars gas field, President Donald Trump said and vowed that “NO MORE ATTACKS WILL BE MADE BY ISRAEL” if Tehran stops attacking Qatar.

But if Iran did not comply, the United States would “massively blow up the entirety of the South Pars Gas Field,” Trump warned.

The dollar strengthened against other major currencies amid heightened tensions in the Middle East and fading expectations for Federal Reserve rate cuts this year.

Gold extended losses and was down over 1 percent at $4,752 on ounce, after having hit a one-month low in the previous session on hawkish Fed comments.

China’s Shanghai Composite Index slumped 1.4 percent to 4,006.55 to hit a six-week low as geopolitical tensions intensify. Hong Kong’s Hang Seng Index tumbled 2.0 percent to 25,500.58.

Japanese markets lost ground as the Bank of Japan kept its rates steady at 0.75 percent, as expected, but warned that future developments in the Middle East “warrant attention.”

Speaking on the outlook, BoJ Governor Kazuo Ueda said at a press conference that the pace of inflation will face upward pressure from higher oil prices and that he cannot say how long it would take to judge whether energy supply shocks affect underlying prices.

Meanwhile, finance minister Satsuki Katayama signaled readiness to take “take necessary action at any time against market volatility.”

The Nikkei 225 Index plummeted 3.4 percent to 53,372.53, while the broader Topix Index closed 2.9 percent lower at 3,609.40.

Seoul stocks tumbled, with the Kospi plunging 2.7 percent to 5,763.22, reflecting investor fears over rising energy costs and potential economic slowdown. Samsung Electronics, SK Hynix and Hyundai Motor all fell around 4 percent.

Australian markets fell sharply to reach a four-month low on the back of mixed jobs data and inflation concern stemming from the West Asia conflict. The benchmark S&P/ASX 200 Index fell 1.7 percent to 8,497.80, with miners and gold stocks leading losses. The broader All Ordinaries Index slumped 1.8 percent to 8,690.70.

Woodside Energy Group shares soared 7.2 percent to hit a more than two-year high as Brent crude prices spiked due to escalating attacks on Middle East energy infrastructure.

New Zealand’s benchmark S&P/NZX-50 Index tumbled 2 percent to 13,051.61, hitting a one-month low amid broad-based selling pressure as data showed the economy expanded 0.2 percent on in the fourth quarter of 2025, slowing from a 0.9 percent rise in the third quarter and falling below expectations for 0.4 percent growth.

Europe

European stocks have tumbled on Thursday as Brent prices surged above $115 a barrel following attacks by Iran on energy facilities in the Middle East.

Major energy hubs across the Middle East are now being directly targeted as the war between Iran and the U.S.-Israeli coalition enters its 19th day.

In economic news, the Bank of England’s Monetary Policy Committee voted “unanimously” keep its benchmark interest rate on hold at 3.75 percent.

The Office for National Statistics said the U.K. unemployment rate remained unchanged and wage growth eased in the three months to January.

The jobless rate held steady at 5.2 percent in the November to January period. Job vacancies decreased 6,000 to 721,000 compared to the previous three months ending November.

The German DAX Index is down by 2.9 percent, the U.K.’s FTSE 100 Index is down by 2.7 percent and the French CAC 40 Index is down by 2.2 percent.

Banking stocks are deep in the red, with Commerzbank, Deutsche Bank, BNP Paribas and Barclays posting steep losses.

German kitchen equipment manufacturer Rational AG has also tumbled after reporting a drop in fourth-quarter profit, impacted by currency effects.

Real estate group Vonovia has also shown a significant move to the downside after reporting lower revenue for the full year.

Specialty chemicals maker Lanxess has also plummeted after reporting a wider fourth quarter net loss and launching additional cost-cutting measures for 2026.

U.S. Economic News

The Labor Department released a report on Thursday showing an unexpected dip in first-time claims for U.S. unemployment benefits in the week ended March 14th.

The report said initial jobless claims fell to 205,000, a decrease of 8,000 from the previous week’s unrevised level of 213,000. Economists had expected jobless claims to inch up to 215,000.

The Labor Department said the less volatile four-week moving average also edged down to 210,750, a decrease of 750 from the previous week’s revised average of 211,500.

Manufacturing activity in the Philadelphia region continued to expand in the month of March, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.

The Philly Fed said its diffusion index for current general activity rose to 18.1 in March from 16.3 in February, with a positive reading indicating growth. Economists had expected the index to pull back to 10.0.

Looking ahead, the Philly Fed said firms continue to expect overall growth over the next six months, although the diffusion index for future general activity slipped to 40.0 in March from 42.8 in February.

At 10 am ET, the Commerce Department is scheduled to release its report on new home sales in the month of January. New home sales are expected to decrease to an annual rate of 720,000 in January from an annual rate of 745,000 in December.

The Commerce Department is also due to release its report on wholesale inventories in the month of January at 10 am ET. Wholesale inventories are expected to rise by 0.2 percent.