Just over a week into the U.S.-Israeli war on Iran, Wall Street has started to price in a prolonged conflict, as hopes for a swift endgame have been crushed.
With no signs of de-escalation, both sides are instead upping the ante, expanding targets to critical infrastructure and risking greater retaliation in the process.
Futures tied to the Dow Jones industrial average crashed 1,011 points, or 2.13%. S&P 500 futures were down 2.01%, and Nasdaq futures lost 2.31%.
Gold dipped 1.3% to $5,029 per ounce, and silver fell 2.1% to $82.50. The yield on the 10-year Treasury spiked 6.6 basis points to 4.198% on expectations of hotter inflation. The U.S. dollar was up 0.83% against the euro and was up 0.60% against the yen.
The region is so reliant on desalination that prior intelligence assessments warned damage to the infrastructure could force evacuations from parched cities.
Meanwhile, the U.S. and Israel attacked an oil depot in Tehran, obliterating supplies used by civilians and the military. Smoke covered the city while acid rain and oily rain fell. Iran’s missiles and drones have also targeted oil and civilian infrastructure around the Gulf.
Iran’s choice for its new supreme leader is seen as a sign that the regime’s hardliners are in control and poised to resist any compromise with the U.S.
When asked in the Oval Office last week for the worst-case scenario in Iran, Trump replied, “I guess the worst case would be we do this and then somebody takes over who’s as bad as the previous person, right? That could happen.”
