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Key Takeaways
- Worries about developments in Iran rattled financial markets Monday, after the U.S. and Israel launched a joint attack over the weekend.
- The major U.S. equities indexes lost ground, with travel-related stocks leading losses, while defense and oil industry stocks gained.
Worries about developments in Iran are rattling financial markets Monday.
Early Saturday, the U.S. and Israel launched a joint attack on Iran, which retaliated against Israel and U.S. interests in several countries across the Middle East. Yesterday, President Donald Trump said the U.S. plans to continue its combat operations in Iran for several more weeks, raising concerns about a protracted conflict.
The major U.S. equities indexes slid Monday, with the Dow Jones Industrial Average, S&P 500, and Nasdaq 100 down about 0.4%, 0.3%, and 0.2%, respectively.
Travel-related stocks led declines on the S&P 500, while shares of American defense contractors were among the top performers. Oil and gas producers also saw shares surge along with prices of the commodities.
How This Impacts Investors’ Portfolios
Investors tend to favor traditional “safe haven” assets such as gold, along with shares of defense, energy, and other security-linked sectors in the face of geopolitical conflicts.
Major Airline Shares Lose Altitude
Global airline stocks dropped Monday as numerous carriers’ operations in the Middle East shut down following U.S. and Israeli bombings of Iran and Iran’s retaliatory strikes. Shares of U.S. carriers Delta Air Lines (DAL), United Airlines Holdings (UAL), and American Airlines Group (AAL) dropped between 3% to 5% in recent trading.
Cruise Operators and Other Travel Stocks Slide
Norwegian Cruise Line Holdings (NCLH) was among the leading decliners in the S&P 500, with shares down nearly 10%. Rival Carnival (CCL) plunged 8%, and Royal Caribbean Group (RCL) slid 4%. Other travel-related stocks, including Booking Holdings (BKNG) and major hotel chains Marriott International (MAR) and Hilton Worldwide (HLT), also lost ground.
Makers of Weaponry and Defense Technology Gain
Data analytics software provider Palantir (PLTR), which counts the U.S. government as a major client, saw its shares soar 6% in recent trading, making it the best-performing stock in the S&P 500 Monday. Defense contractors Lockheed Martin (LMT), RTX (RTX), and Northrop Grumman (NOC) also surged.
Energy Stocks Follow Oil and Gas Prices Higher
West Texas Intermediate crude and natural gas prices jumped about 6% and 4%, respectively, lifting shares of major energy companies. Shares of oil giants ConocoPhillips (COP), ExxonMobil (XOM), Chevron (CVX), Occidental Petroleum (OXY), and Phillips 66 (PSX) all climbed. LNG suppliers Venture Global (VG) and Cheniere Energy (LNG) soared 17% and 7%, respectively.
Read Investopedia’s full coverage of Monday’s trading here.
