U.S. stock futures dropped early Wednesday morning on news that rockets were fired at an Iraqi airbase that hosts American troops.
Around 5:10 a.m. ET, Dow Jones Industrial Average futures indicated a loss of more than 100 points at Wednesday’s open. Dow futures recovered from steep losses in after-hours trading, when futures were off 400 points on news of the rocket attacks. S&P 500 and Nasdaq 100 futures also pointed to early declines Wednesday.
U.S. military officials told NBC News the Al Asad airbase, which is located in western Iraq, has come under attack, with multiple projectiles hitting it.
The Pentagon later confirmed the report, saying in a statement: “Iran launched more than a dozen ballistic missiles against U.S. military and coalition forces in Iraq. It is clear that these missiles were launched from Iran and targeted at least two Iraqi military bases hosting U.S. military and coalition personnel at Al-Assad and Irbil.”
President Donald Trump responded to Tuesday night’s attack by Iran.
“All is well! Missiles launched from Iran at two military bases located in Iraq,” Trump tweeted. “Assessment of casualties & damages taking place now. So far, so good! We have the most powerful and well equipped military anywhere in the world, by far! I will be making a statement tomorrow morning.”
The attacks also sparked a surge in oil prices as well as gold prices, which is considered to be a safe-haven asset.
Brent futures jumped to around $68.70 per barrel, after earlier gaining 4%. Gold futures for February delivery were up by 1.13%, trading at $1,592.1 per ounce; earlier it broke above the $1,600 mark for the first time since 2013.
The Japanese yen, another safe-haven asset, traded at 108.35 against the U.S. dollar after earlier strengthening to a level around 107.63.
Dow futures were also weighed down by a drop in shares of Dow compenent Boeing. A Ukraine International Airlines Boeing 737 airliner burst into flames shortly after take-off from Tehran on Wednesday, killing all 176 people aboard in a crash that an initial report blamed on engine failure. Ukrainian officials later said, however, that the cause of the crash was yet to be determined.
Investors around the globe have been monitoring the latest developments between Iran and the U.S. after last week’s assassination of Gen. Qasem Soleimani, a top-ranking Iranian military official.
Stocks initially sold off on Friday following news of Soleimani’s death while oil surged, stoking fears of a sharp rise in fuel prices that could dent an already fragile economy. In December, the U.S. manufacturing sector had its biggest contraction in more than a decade.
Equities had managed to stabilize through the first two sessions of this week, however, while oil gave back some of its earlier gains.
On Tuesday, the Dow lost more than 100 points while the S&P 500 also closed lower. The Nasdaq Composite ended the day just below the flatline.
“Most participants remained cautious … as it’s still unclear how the standoff between the U.S. and Iran could affect financial markets,” said Ken Berman, founder of Gorilla Trades, about Tuesday’s session. “Volatility remained relatively low today, but investors remained nervous.”
In terms of U.S. economic data, ADP employment figures are due out at 9:15 a.m. ET, and consumer credit numbers are expected at 3 p.m.
In corporate news, Walgreens Boots Alliance, Constellation Brands, and Lennar will be reporting before the bell.
