The conflict between Israel and Iran is intensifying, with both countries not backing down from strikes and their leaders continuing to issue heated rhetoric. The prospect of the United States potentially joining the fray — which Russia warned would cause “a terrible spiral of escalation” — is putting the world on a knife’s edge.
That unease is reflected in the markets. While U.S. exchanges were closed Thursday for a holiday, futures retreated in the evening local time and oil prices jumped during the U.S. trading session. Across the Atlantic, travel and leisure stocks suffered the most as the Middle East conflict cast a shadow over international aviation.
At the Paris Air Show, however, aircraft manufacturers are still booking billions in orders. Airbus had secured more than $20 billion in deals as of Thursday, according to calculations. That said, those encouraging numbers may not reflect immediate optimism about the global economy or geopolitics — aircrafts take years to deliver, and both Airbus and Boeing have a backlog of more than 8,000 and 5,000 aircraft.
Until investors get a clearer sense of whether the U.S. will launch strikes on Iran, markets aren’t likely to find solid ground.
U.S. futures slipped Thursday evening stateside. Regular trading in the U.S. was closed for the Juneteenth holiday. Meanwhile, oil prices for U.S. crude oil and international benchmark Brent rose roughly 3% during the U.S. trading session after Israeli Prime Minister Benjamin Netanyahu ordered the military to intensify attacks on Iran. Europe’s regional Stoxx 600 lost 0.83%, with travel and leisure stocks falling the most. – CNBC
