Oil prices, defense stocks, and gold surge, S&P 500 tumbles after Israel attacks Iran
The S&P 500 fell, oil and gold prices jumped, and defense stocks, including Lockheed Martin, rallied amid a Middle East missile attack.
Updated 10:35 EST on Friday, June 13.
The stock market has rallied over 20% since April 9, when President Trump paused most reciprocal tariffs announced on April 2, so-called "Liberation Day."
The rally has lifted stocks despite significant uncertainty over the US economy, including risks of sticky inflation and slowing economic activity.
Now the S&P 500 faces another geopolitical challenge.
On June 12, Israel launched a missile attack on Iran targeting nuclear facilities, including military locations within Tehran. The attack also targeted key leaders of Iran.
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Among those killed in the attack are General Hossein Salami, the Revolutionary Guard's commander, and Major General Mohammad Bagheri, the highest-ranking military officer in Iran, according to CNN.
Israel's Prime Minister Benjamin Netanyahu, who labeled the attack “Operation Rising Lion,” said the attack will continue for days.
Iran launched a drone attack involving hundreds of drones in response. Additional Iranian attacks on Israel are possible.
White House calls on Iran to negotiate
The attack follows comments from President Donald Trump on Wednesday, warning, "There’s a chance of massive conflict" in the Middle East amid negotiations regarding Iran's nuclear program.
On Friday, President Trump reaffirmed support for Israel and called on Iran to continue negotiating an end to their nuclear program.
"Two months ago I gave Iran a 60 day ultimatum to “make a deal.” They should have done it! Today is day 61. I told them what to do, but they just couldn’t get there. Now they have, perhaps, a second chance!," wrote Trump on Truth Social.
The Trump Administration has denied involvement in the attack.
"Tonight, Israel took unilateral action against Iran. We are not involved in strikes against Iran and our top priority is protecting American forces in the region," said U.S. Secretary of State Marco Rubio in a statement.
Iran’s Supreme Leader Ayatollah Ali Khamenei said the country's response to Israel will deliver “severe punishment.”
Crude oil prices, gold prices, and defense stocks surge
Crude oil prices are rising on concerns that tensions will spill over, potentially impacting Middle East crude oil shipments.
In 2023, 20.9 million barrels per day were transported through the Straight of Hormuz between Oman and Iran, equivalent to roughly 20% of global petroleum liquids consumption.
Brent and U.S. West Texas Crude oil prices rose roughly 7% to $74.10 and $72.93 a barrel, respectively. WTI crude is trading at its highest levels since early February, trading up about 18% over the past month.
Gold prices are similarly climbing amid the uncertainty of the Middle East. Gold, up 30% year-to-date on worry over the tariff impact on the US and global economies, is rallying 1.5% to $3,452.10.
Stocks are broadly falling due to increased uncertainty. In early trading, the S&P 500 and Nasdaq fell 1% and 1.3%, respectively.
Financials and semiconductors are leading the losses. The Financial Select Sector SPDR Fund (XLF) and VanEck Semiconductor ETF (SMH) are down 2.2% each.
Defense stocks, however, are higher. RTX Corp (RTX) , formerly Raytheon, is up 3.4% and Lockheed Martin (LMT) is up 2.4% in early trading.
RTX makes defense systems, including air-to-air and air-to-surface missiles, electronic warfare systems, and radar and sensor technologies.
Lockheed Martin makes fighter jets, missile systems, and air defense systems.
Aerovironment Inc (AVAV) and Kratos Defense & Security Systems (KTOS) are also rallying. Aerovironment, a maker of military drones, is up 2.1%, while Kratos, which manufactures drones and missile defense systems, is up 2%.
This is a developing story.
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