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Futures down: Dow 1%, S&P 500 0.91%, Nasdaq 1.12%

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Airline stocks slide as Israel strikes Iran

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US defense firms rise on Israel-Iran conflict

(Updates with prices)

By Kanchana Chakravarty and Sukriti Gupta

June 13 (Reuters) - U.S. stock index futures dropped on

Friday after Israel's military strike on Iran's nuclear

facilities escalated 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.

An escalation in the conflict can "drag the U.S. into it, in

which case, we would expect that global oil and gas supply will

be disrupted for longer," analysts at Panmure Liberum said in a

note.

Oil prices surged nearly 9% and U.S. energy stocks rose in

tandem, with Chevron ( CVX ) and Exxon advancing 3.1%

and 3.5% in premarket trading.

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 07:06 a.m. ET, Dow E-minis were down 430 points,

or 1%, S&P 500 E-minis were down 55.25 points, or 0.91%,

and Nasdaq 100 E-minis were down 245 points, or 1.12%.

A 1.5% slump in Russell futures pointed to sharp

declines for domestically focused stocks, while the Cboe

Volatility Index, known as Wall Street's "fear gauge",

rose to its highest in three weeks earlier in the session.

Airline stocks dipped as the surge in crude prices raised

concerns about higher fuel costs. Delta Air Lines ( DAL ) was

down 3.8%, United Airlines dropped 4.7%, Southwest

Airlines ( LUV ) lost 2.5% and American Airlines ( AAL )

declined 3.9%.

Defense stocks rose, with Lockheed Martin ( LMT ) up 4.2%,

RTX Corporation ( RTX ) up 5.6%, Northrop Grumman ( NOC ) up

4.6% and L3harris Technologies ( LHX ) up 4.9%.

U.S.-listed shares of gold miners also rose, after bullion

prices hit a near two-month high with investors rushing to

safe-haven assets. Newmont ( NEM ) gained 1.1%, Harmony Gold

was up 1.2% and AngloGold Ashanti ( AU ) rose 1.5%.

The S&P 500 still remains just 1.8% 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 is about 2.8% off its record

closing high reached in December last year.

A tame consumer price report on Wednesday,

softer-than-expected producer price data and largely unchanged

initial jobless claims on Thursday helped reduce investor

jitters around tariff-driven price pressures. However,

policymakers are widely expected to keep rates unchanged 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 fell 3.4% despite the

Photoshop maker raising its full-year results forecast.