U.S. stock futures were near zero early Tuesday as Wall Street assessed the impact and risks of a protracted conflict from the war between Israel and Hamas.
Dow Jones Industrial Average and S&P 500 futures traded near zero, while Nasdaq 100 futures gained 0.04%.
During Monday’s trading session, stocks were initially lower – the Nasdaq fell more than 1% at its session lows – before turning positive across the board. The 30-stock Dow gained 197 points, or 0.6%, while the Nasdaq Composite gained 0.4%. The S&P 500 gained 0.6%.
Amid the conflict, West Texas Intermediate and Brent crude oil prices rose more than 4%, recording their best days since April. Energy and defense stocks also rose sharply.
Hamas’ attack on Israel is the deadliest offensive in 50 years. At least 900 people have been killed in Israel so far in what Hamas calls Operation Al-Aqsa Flood. According to the latest figures, more than 687 people have died in Gaza and the West Bank in Israeli retaliatory attacks across the Gaza Strip.
Hamas is an Iranian-backed terrorist group that has ruled the Gaza Strip since 2007.
“Of course it will worry the markets a bit. But what we’ve seen over time is that the impact of geopolitical events tends to be more limited over the longer term,” Meera Pandit, global market strategist at JPMorgan Asset Management, said on CNBC’s “Closing Bell” on Monday.
In the wake of the attacks, investors also raised concerns about how tougher sanctions against Iran could affect global oil supplies.
Tightened sanctions against Iran and resulting disruptions to Iranian oil supplies “would have a greater impact on oil markets,” said Yung-Yu Ma, chief investment officer of BMO Capital Markets.
“I think the oil markets have a little bit of a buffer here. Just a few weeks ago we were about 5% higher than.” 1696923251. …But there is a risk of developments, in a situation like this, [that] are very difficult to predict,” Ma said.
Investors will be keeping an eye on upcoming economic data. September NFIB Small Business Survey data will be released on Tuesday, as will August wholesale inventory numbers. Wall Street will also be closely watching PepsiCo’s quarterly results on Tuesday before trading opens.