New military strikes by the United States and Israel on Iran continued after weekend strikes that killed Supreme Leader Ayatollah Ali Khamenei, prompting Tehran to launch missile strikes across the region and raising fears that the conflict could spread and potentially affect neighboring countries.According to a media report, US President Donald Trump said the conflict could continue for another four weeks, adding that attacks would continue until the US achieved its stated objectives.
The geopolitical shock comes just as markets brace for a series of key US economic data. Industrial PMIs for the past month will be released later today, while January retail sales, ADP employment figures and the closely watched non-farm payrolls data will be released later this week.
A prolonged spike in oil prices would risk a resurgence of inflation pressures, with traders already dealing with a hot inflation reading that is reinforcing expectations that the US Federal Reserve is unlikely to cut its key interest rate any time soon.
At 2:20 a.m. (ET), the Dow E-minis were down 680 points, or 1.39%, the S&P 500 E-minis were down 100.5 points, or 1.46%, and the Nasdaq 100 E-minis were down 464 points, or 1.86%. February was a month of volatility for the markets. fueled by uncertainty over AI-related costs and disruptions, renewed tariff concerns and simmering geopolitical tensions, keeping risk appetite in check.
The S&P 500 and Nasdaq posted their steepest monthly declines since March 2025. The Dow Jones, on the other hand, posted a 10th straight month of gains, its longest winning streak since a 10-month period ending in January 2018.
Last Friday, financial and technology stocks led the retreat, with the Dow Jones closing down more than 1%, the Nasdaq down 0.9% and the S&P 500 finishing 0.4% lower.
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