U.S. Markets Headed Lower After Deadly Israel-Hamas Conflict Killed 1,100

Barry Adams
09 Oct, 2023
New York City

Crude oil prices and rising geopolitical tensions overshadowed sentiment in stock markets in Monday's trading. 

Crude oil surged as much as 4% and Israel declared war following rocket attacks from Hamas based in the West Bank and Gaza Strip. 

Hamas launched air attacks on 22 locations in Israel, surprising military establishment and intelligence agency Mossad for their collective failures in monitoring the militant group that is seeking independence of Palestine. 

Israeli Prime Minister Benjamin Netanyahu declared a siege of Gaza Strip controlled by Hamas and the Israeli military stepped us its bombing attacks that have killed at least 550 Palestinians.  

For decades, Palestinians have been demanding an independent state and Israeli forces have been annexing land once owned by Palestinians and building homes for settlers. 

Neither Palestine nor Israel are significant players in the energy market, but the latest conflict may spill over to neighboring states and oil producing states in the region and disrupt crude oil distribution. 

Israeli shekel dropped to a seven-year low to 3.90 against the U.S. dollar and the Bank of Israel announced its plan to sell $30 billion and provided additional liquidity of $15 billion to support the falling shekel. 

 

U.S. Indexes & Yields 

The S&P 500 index decreased 0.4% to 4,290.76 and the Nasdaq Composite fell 0.9% to 13,306.32. 

The bond market was closed to observe Columbus Day but in Friday's trading U.S. Treasury yields advanced. 

The yield on 2-year Treasury notes increased to 5.10%, 10-year Treasury notes inched higher to 4.84% and 30-year Treasury bonds edged down to 5.0%. 

Crude oil increased $3.65 to $86.45 a barrel and natural gas prices increased 4 cents to $3.38 a thermal unit. 

The dollar index edged higher to 106.24, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.  

 

U.S. Stock Movers 

The surge in crude oil prices lifted energy stocks higher but airlines fell on the worries of higher fuel costs. 

Exxon Mobil, Chevron, Marathon Oil, Hess Corp and Occidental Petroleum jumped around 3%. 

United Airlines, Delta Air Lines and American Airlines dropped 3% after crude oil prices surged. 

Allied Pilots Association, the union of American Airlines' pilots issued a directive asking all its members to refuse to fly to Israel after the country declared war. 

Defense stocks advanced after the Israel and Hamas conflict escalated and at least 1,000 people have died in the recent attacks and counterattacks. 

Lockheed Martin, Northrop Grumman Corp and RTX Corporation advanced about 4%.