US STOCKS-Wall St eyes lower open as Israel-Iran conflict hits risk appetite

Reuters
13 Jun
US STOCKS-Wall St eyes lower open as Israel-Iran conflict hits risk appetite

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Futures down: Dow 0.88%, S&P 500 0.8%, Nasdaq 1.07%

Airline stocks slide as Israel strikes Iran

US defense firms rise on Israel-Iran conflict

Updates before markets open

By Kanchana Chakravarty and Sukriti Gupta

June 13 (Reuters) - Wall Street's main indexes were on track to open lower on Friday after Israel's deadly strike on Iranian nuclear facilities inflamed tensions in the oil-rich Middle East and battered risk sentiment across global markets.

Israel has warned that the widescale strikes were the start of a prolonged operation to prevent Tehran from building an atomic weapon. Iran has promised a harsh response.

Oil prices surged nearly 9% on fears the conflict could disrupt crude supply from the Middle East. U.S. energy stocks rose in tandem, with Chevron CVX.N up 2.7% and Exxon XOM.N advancing 3.3% in premarket trading.

Airline stocks also dropped as fuel costs could surge if supply bottlenecks materialize. Delta Air Lines DAL.N was down 5.2%, United Airlines UAL.O dropped 5.3%, Southwest Airlines LUV.N lost 3.4% and American Airlines AAL.O declined 4.8%.

On the other hand, defense stocks climbed, with Lockheed Martin LMT.N up 3.1%, RTX Corporation RTX.N up 3.9%, Northrop Grumman NOC.N up 3.8% and L3harris Technologies LHX.N up 2.8%.

"We have major domestic policy uncertainty and now on top of that, you have geopolitical unrest, which not only is impacting oil markets, but the broader risk premium," said Eric Teal, chief investment officer at Comerica Wealth Management.

Washington said it had no part in the operation, but President Donald Trump suggested Iran had brought the attack on itself by resisting U.S. demands to restrict its nuclear programme. Officials from both countries were due to meet in Oman on Sunday for a planned sixth round of nuclear talks.

Trump also urged Iran to make a deal, saying "the next already planned attacks" will be "even more brutal".

At 08:37 a.m. ET, Dow E-minis YMcv1 were down 378 points, or 0.88%, S&P 500 E-minis EScv1 were down 48.25 points, or 0.8%, and Nasdaq 100 E-minis NQcv1 were down 234.5 points, or 1.07%.

U.S.-listed shares of gold miners rose as the Israel-Iran conflict sent investors rushing to safe-haven assets, lifting bullion prices to a near two-month high. Newmont NEM.N gained 1.2%, Harmony Gold HMY.N was up 0.7% and AngloGold Ashanti AU.N rose 1.6%.

The S&P 500 .SPX still remains just 1.6% below its record high reached earlier this year, following stellar monthly gains in May driven by upbeat corporate earnings and a softening in Trump's trade stance.

The tech-heavy Nasdaq .IXIC is about 2.5% off its record closing high reached in December last year.

A tame consumer price report, softer-than-expected producer price data and largely unchanged initial jobless claims earlier this week helped calm investor jitters around tariff-driven price pressures. However, Federal Reserve policymakers are widely expected to keep rates unchanged at their meeting next week.

A preliminary reading of consumer sentiment for June, measured by the University of Michigan Surveys of Consumers, is due at 10:00 a.m. ET.

Among other movers, Adobe ADBE.O fell nearly 4% despite the Photoshop maker raising its full-year results forecast.

(Reporting by Kanchana Chakravarty and Sukriti Gupta in Bengaluru; Editing by Devika Syamnath)

((Kanchana.Chakravarty@thomsonreuters.com;))

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