The war in the Middle East is once again influencing investors this Friday. Israel has launched a strong offensive against nuclear and military targets in Iran early this morning, and this is having an impact on the market: stocks have suffered significant declines, close to 1.5%, and oil has surged after rising 13% overnight, marking its biggest intraday increase since March 2022.
The situation in the region continues to escalate. Iran, in response, launched over a hundred drones against Israel. Meanwhile, U.S. Secretary of State Marco Rubio has denied the involvement of the Donald Trump administration in the attacks carried out by the Israeli Army early Friday morning against alleged nuclear targets in Iran, stating that it is a "unilateral action" by their ally in the Middle East. However, he acknowledged that the Israeli government informed them that this action was "necessary" for their self-defense.
The Brent, the European benchmark, rises 4% at the close of the European market, slightly below $70 per barrel. Iran is the world's eighth-largest producer of black gold. Additionally, this offensive has raised "concerns about possible disruptions to trade passing through the Strait of Hormuz - an estimated 30% of global oil trade and 20% of LNG pass through this channel," as noted by Banca March in its daily analysis.
"An escalation of the conflict is expected, so almost certainly, this situation will keep oil prices high," says ActivoTrade. Airlines, major consumers of oil, are the most affected sector of the session. In Spain, IAG, the Hispano-British holding company, saw declines exceeding 7% in early trading, dropping to ¤3.66 per share, although by the end of the session, the sales were contained to a 3.6% decrease, slightly less, around 4%. This situation extends to the rest of the sector. The German Lufthansa lost 6% at the start of Friday, later moderating the decline to 2.8%; easyJet dropped less than 3% compared to Air France-KLM, which fell 4.8% in the session. Many airlines have already canceled their flights in the region.
Wall Street has opened with declines around 1%, such as the Dow Jones, which is contained at 0.7% in the S&P 500.
Among the major European indices, the Ibex 35 suffers a 1.3% decline, dropping below 14,000 points, although losses briefly exceeded 1.8%. The index is down 2.4% for the week. Losses are also seen across other European markets, including the DAX in Frankfurt, the EuroStoxx 50, and the CAC 40 in Paris. The big winners in the current situation are once again defense companies and arms manufacturers like Bae Systems or Rheinmetall, with increases close to 3%.
Money, always fearful, seeks refuge in gold, which rises 1%, consolidating at $3,430 per ounce. And the world remains the same... because Donald Trump, President of the U.S., far from toning down, has once again called the Fed President, Jerome Powell, 'idiot' tonight, for not wanting to comply with his wishes and lower interest rates. After the initial purchases of American debt in the session, the U.S. 10-year bond is once again being sold by investors, pushing its yield up to 4.42% on Friday.