The Middle East conflict escalates, oil prices soar impacting US stocks, energy and defense stocks rise while travel stocks decline.

Due to the impact of Israel's large-scale airstrikes against Iran's military and nuclear facilities, global stock markets experienced significant volatility this week, oil prices surged, and energy and defense stocks rose strongly. However, widespread geopolitical uncertainty weighed down the overall stock market performance, with travel and airline stocks under pressure. The following is a comprehensive analysis report, purely market observation, and not any investment advice.

The tensions in the Middle East have triggered a surge in oil prices.

This week, oil prices surged nearly 13%, marking the largest weekly increase since October 2022. West Texas Intermediate (WTI) futures soared to $77.50 per barrel at one point, eventually retreating to around $73, still up more than 7% from the previous day's closing price. Meanwhile, U.S. gasoline futures also jumped 4%, reaching $2.21 per gallon, the largest weekly increase in three months.

This wave of pump is due to Israel's airstrikes on Iranian infrastructure, resulting in the deaths of high-ranking officials, causing market concerns that Iran will carry out retaliatory actions. Traders are highly focused on supply risks in the region, especially since one-third of the world's crude oil passes through the strategic Strait of Hormuz.

ING: Oil prices could surge to 120 USD, with the worst-case scenario reaching 150 USD.

Warren Patterson, the head of commodity strategy at ING Group, stated that if there is a serious disruption in the Strait of Hormuz, up to 14 million barrels of oil supply globally per day would be threatened, and oil prices could potentially exceed $120 per barrel. He further pointed out that if the supply disruption continues until the end of the year, Brent crude oil could even challenge the historical high of nearly $150. Iran currently produces 3.3 million barrels of oil per day and exports about 1.7 million barrels, making this military conflict particularly sensitive, and Wall Street analysts are closely monitoring the news.

The three major U.S. stock indices fell.

Geopolitical risks have intensified, leading to an increase in market risk aversion, with the three major U.S. stock indices generally falling on Friday.

The S&P 500 index fell by 0.9%

The Dow Jones Industrial Average fell by 1%.

The Nasdaq 100 index fell by 1.1%.

Energy and defense-related stocks are rising against the trend.

Energy stocks:

Occidental Petroleum (NYSE: OXY) rose 4.8%.

APA (APA Corp. NASDAQ symbol APA) rose 4.76%

Diamondback Energy (Diamondback Energy Inc NASDAQ symbol FANG) increased by 4.68%

Halliburton (Halliburton Co NYSE ticker Halliburton) and Schlumberger (Schlumberger NV NYSE ticker SLB) both rose by more than 4%.

Defense stocks:

Northrop Grumman Corp (NYSE: NOC) rose 3.94%

Lockheed Martin Corp (NYSE: LMT) is up 3.1%.

RTX (RTX Corp NYSE ticker RTX) pumped 4 %

Travel and aviation industries hit hard

Under the dual pressure of soaring oil prices and an uncertain situation in the Middle East, travel and airline stocks have plummeted.

Carnival Corporation (NYSE: CCL) fell 5.24%

United Airlines (NASDAQ symbol UAL) fell 4.82%

Delta Air Lines (NYSE: DAL) fell 4.58%

Analysts point out that the surge in oil prices could spread to other U.S. stock markets, and investors should remain vigilant if the situation in the Middle East continues to deteriorate. With the rise in oil prices and increased supply risks, energy and defense stocks are demonstrating resilience, becoming the focus of the market. In the coming weeks, the market will closely monitor whether Iran will take retaliatory actions and whether the United States or other major powers will further intervene.

This article discusses the escalation of the Middle East conflict, the surge in oil prices impacting US stocks, with energy and defense stocks rising while travel stocks decline. It first appeared in Chain News ABMedia.