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Futures down: Dow 0.88%, S&P 500 0.8%, Nasdaq 1.07%
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Airline stocks slide as Israel strikes Iran
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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 ) up 2.7% and Exxon
advancing 3.3% in premarket trading.
Airline stocks also dropped as fuel costs could surge if
supply bottlenecks materialize. Delta Air Lines ( DAL ) was down
5.2%, United Airlines dropped 5.3%, Southwest Airlines ( LUV )
lost 3.4% and American Airlines ( AAL ) declined 4.8%.
On the other hand, defense stocks climbed, with Lockheed
Martin ( LMT ) up 3.1%, RTX Corporation ( RTX ) up 3.9%,
Northrop Grumman ( NOC ) up 3.8% and L3harris Technologies ( LHX )
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 were down 378 points,
or 0.88%, S&P 500 E-minis were down 48.25 points, or
0.8%, and Nasdaq 100 E-minis 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 ) gained
1.2%, Harmony Gold was up 0.7% and AngloGold Ashanti ( AU )
rose 1.6%.
The S&P 500 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 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 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)