U.S. stock futures are sharply lower in premarket trading after the U.S. and Israel attacked Iran over the weekend, causing oil prices to surge and adding an unstable Middle East to a list of growing worries for equity investors.

The joint U.S.-Israeli strikes killed Supreme Leader Ayatollah Ali Khamenei, marking a stark leadership pivot that has lasted since 1979. The large-scale assault was launched overnight Saturday after Iran refused American demands to curb its nuclear program.

Iranian officials have vowed a forceful retaliation, raising fears the conflict could spread across the region. U.S. crude prices jumped above $75 a barrel overnight, as investors worry the confrontation could spiral into a broader war that disrupts supplies. Iran is the fourth-largest oil producer in OPEC, and uncertainty remains in the energy sector.

The move lower in equities come after a volatile month for stocks with the S&P 500 off nearly 1% in February while the Nasdaq-100 dumped over 2%. Focus will remain on geopolitical risks, earnings this week, and rising volatility with the VIX at over 3-month highs. 

Snapshot (as of 7 AM ET)

• Oil (/CL) – Crude oil prices jumped almost 9% near $73 a barrel as market participants fear war between the U.S. and Iran will spiral out of control and lead to a major supply disruption. Oil briefly hit over $75 a barrel for the first time in over 8 months. How the oil market ultimately reacts will depend on whether the war leads to a prolonged disruption to traffic through the Strait of Hormuz, the most important chokepoint in the world for the global oil trade. OPEC+ agreed to boost oil output modestly by 206,000 barrels per day for April just as the U.S.-Israeli war on Iran and Tehran's retaliation disrupted oil flows from key members of the producer group in the Middle East, Reuters' reports.
• Gold (/GC) – Gold futures are up about 3% near $5,410 after the U.S. and Israel launched major strikes on Iran, killing Supreme Leader Ayatollah Ali Khamenei, escalating geopolitical tensions and deepening global economic uncertainty.
• Bitcoin (/BTC) – The Crypto Future is up 0.5% near 66,200 in premarket trading.
• VIX – The CBOE Volatility Index was up 12% on Friday and settled at 20.90 as stocks were lower. The VIX is up over 16% this morning near 23 and is at over 3-month highs as stocks are under pressure.
• U.S. Dollar (/DX) – The dollar is up almost 0.9% to 98.4.

Biggest Premarket Movers (as of 7 AM ET - Mark % Change)

1. CF Industries (CF): +8.30%
2. APA Corp. (APA): +8.00%
3. Occidental Petroleum (OXY): +7.16%
4. Mosaic (MOS): +6.03%
5. EOG Resources (EOG): +5.74%

1. AES Corp. (AES): -16.15%
2. Carnival (CCL): -7.32%
3. Norwegian Cruise Line (NCLH): -6.98%
4. Royal Caribbean (RCL): -6.77%
5. United Airlines (UAL): -6.68%

Economic Data

• 9:45 AM ET: PMI Manufacturing (Final)
• 10:00 AM ET: ISM Manufacturing 

Notable Earnings

• Premarket: ADT, BRK/A, CRC, SATS, NCLH, RDNT
• Postmarket: ACHR, BBAI, IHRT, MDB, PLUG, QUBT, RIOT, STNE
• Premarket Tomorrow: ADV, AZO, BBY, EVGO, KTB, ONON, SE, TGT, THO, VSNT, VIK
• Postmarket Tomorrow: BOX, CRWD, GTLB, ROST

Upgrades/Downgrades

• Piper Sandler upgrades CrowdStrike (CRWD) to Overweight from Neutral
• JPMorgan upgrades Netflix (NFLX) to Overweight from Neutral
• TD Cowen upgrades Twilio (TWLO) to Buy from Hold
• Goldman Sachs downgrades Novo Nordisk (NVO) to Neutral from Buy
• KGI Securities downgrades PayPal (PYPL) to Neutral from Outperform
• TD Cowen downgrades GitLab (GTLB) to Hold from Buy

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