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 finished mixed, with travel-related stocks leading losses, while defense and oil industry stocks gained.
Worries about developments in Iran are rattling financial markets to start the week.
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 finished mixed Monday, with the Dow Jones Industrial Average sliding 0.2%, while the S&P 500 rose less than 0.1% and the Nasdaq 100 added 0.4%.
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 climb 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 2% to 4%.
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 11%. Rival Carnival (CCL) plunged close to 8%, and Royal Caribbean Group (RCL) slid 3%. Other travel-related stocks, including Booking Holdings (BKNG) and major hotel chains Marriott International (MAR) and Hilton Worldwide (HLT), also lost ground.
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Makers of Weaponry and Defense Tech Gain
Defense contractor Northrop Grumman (NOC) saw its shares soar 6%, making it the best-performing stock in the S&P 500 Monday. Data analytics software provider Palantir (PLTR), which counts the U.S. government as a major client, saw its shares jump almost 6%. RTX (RTX) and Lockheed Martin (LMT) also rose.
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 supplier Venture Global (VG) soared 17% and Cheniere Energy (LNG) rose over 5%.
Read Investopedia’s full coverage of Monday’s trading here.
This article has been updated since it was first published to reflect more recent prices.