US stock futures dropped sharply on Friday following Israel’s military strike on Iran’s nuclear facilities, rattling global markets. Futures for the Dow Jones Industrial Average fell 1.2%, S&P 500 futures declined 1.3%, and Nasdaq 100 futures dropped 1.5%.
On Thursday night, Israel launched a “preemptive strike” targeting Iran’s nuclear program amid concerns over Tehran’s weapons development.
Explosions were reported in Tehran, Iran’s capital. The attack pushed crude oil prices up by 8%, reflecting fears about supply disruption from the third-largest OPEC+ producer. Gold, a safe-haven asset, also rose by about 1% as investors sought security amid the tensions.
Israel’s Defense Minister declared a state of emergency, signaling readiness for potential retaliation. Meanwhile, US Secretary of State Marco Rubio stated that the US was not involved in the strikes and warned Iran against targeting American interests.
The attack came after a day of cautious optimism in the stock market, despite uncertainty over President Trump’s trade policies and calls for Federal Reserve rate cuts. Trump had hinted at raising auto tariffs and reiterated his demand for a significant Fed rate cut amid easing inflation.
Investors will watch closely for the University of Michigan consumer sentiment survey on Friday, which will provide insight into consumer confidence amid tariff uncertainties.
Attention will then shift to the Federal Reserve’s interest rate decision expected next Wednesday, where rates are widely expected to remain unchanged.
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