Breaking! Iran: Hits US aircraft carrier! Crude oil soars, Dow plunges over 1100 points!

Middle East conflict continues to shake up financial markets.

As tensions around Iran escalate and spill over beyond the Middle East, U.S. stocks experienced intense volatility overnight, with the Dow Jones Industrial Average plunging over 1,100 points intraday, international oil prices surged sharply, with WTI crude futures for April rising over 8%, marking the largest single-day gain since May 2020.

Regarding the situation, according to CCTV News, on March 5 local time, a spokesperson from Iran’s Hatam Ansar Central Command stated that the U.S. Abraham Lincoln aircraft carrier was hit by an unmanned drone from the Iranian Islamic Revolutionary Guard Corps Navy in the Oman Sea, 340 kilometers from Iran’s waters. The Israeli Defense Forces announced that day that the Israeli Air Force had launched a new round of airstrikes against targets in Tehran.

Dow plunges sharply

On March 6 Eastern Time, all three major U.S. stock indices declined across the board, with the Dow dropping over 1,100 points at one point during the day, ultimately closing down 1.61%. The Nasdaq fell 0.26%, and the S&P 500 declined 0.57%.

Large-cap tech stocks in the U.S. showed mixed performance: Broadcom surged over 4%, Microsoft rose more than 1%, Amazon gained nearly 1%, and Nvidia closed slightly higher; Meta dropped over 1%, while Apple, Google, and Tesla saw modest declines.

Oil prices also surged, with WTI crude futures for April jumping 8.5% to over $81 per barrel, the largest single-day increase since May 2020; WTI futures for April rose 4.93% to $85.41 per barrel.

Since the beginning of the week, WTI and Brent crude prices have increased by over 20% and 17%, respectively, amid ongoing concerns about disruptions to oil transportation through the Strait of Hormuz.

Data shows that due to escalating conflict, the war appears to have completely halted tanker navigation through the Strait of Hormuz. However, Iran’s Permanent Mission to the UN stated on social media on the 5th that claims of Iran blocking the Strait of Hormuz are baseless and absurd, emphasizing that Iran consistently adheres to international law and maintains freedom of navigation.

Meanwhile, U.S. natural gas futures rose nearly 3%, and diesel futures increased about 7%. Rising energy prices could boost inflation, complicating Federal Reserve policy outlooks and exerting pressure on the stock market.

Lee Hardman, senior foreign exchange economist at Mitsubishi UFJ Financial Group, said in a report: “Uncertainty remains high regarding the current situation, and the market cannot yet determine how long the conflict will last or the extent of disruption to global energy supplies.”

Rob Haworth, senior investment strategist at U.S. Bank, noted that key concerns include: first, whether shipping through the Strait of Hormuz can resume; second, how long the war will last. The market has hoped this conflict would be short-lived, but as the scope of the conflict expands, prolonged war and further impact could significantly worsen risk sentiment.

Iranian military claims to have hit U.S. ‘Lincoln’ carrier

In the early hours of March 6 Beijing time, according to CCTV News, a spokesperson from Iran’s Hatam Ansar Central Command stated that on March 5 local time, the Iranian Islamic Revolutionary Guard Corps Navy drone struck the U.S. aircraft carrier Abraham Lincoln near Iran’s waters in the Oman Sea, 340 km from Iran. The carrier and its escort ships quickly withdrew and have now moved more than 1,000 kilometers away from the area.

The IRGC announced that the 21st round of “True Commitment 4” retaliatory operations has been launched, combining missile and drone strikes, including the launch of the Kheybar Shekan ballistic missile, targeting locations in central Tel Aviv.

Meanwhile, Israel launched a new round of attacks. On March 5, the Israeli Defense Forces announced that the Israeli Air Force had conducted a new round of airstrikes against targets in Tehran. This was the 13th round of airstrikes on Tehran since the conflict began, and the second that day.

That evening, IDF Chief of Staff Zamiir stated at a press conference that the military was entering the next phase of operations, with plans to intensify efforts to undermine Iran’s regime and military capabilities.

It is noteworthy that spillover of the conflict is heightening regional tensions. Abu Dhabi was attacked again on the 5th. The UAE’s National Emergency Crisis and Disaster Management Authority said that its air defense systems are currently responding to missile threats.

Azerbaijan’s President Aliyev convened a security council meeting on the 5th. He stated that Iran used drones to carry out terrorist attacks against Azerbaijan, and ordered Azerbaijani armed forces to develop and implement retaliatory measures.

According to official Bahraini sources, a facility at Bahrain’s main oil refinery was hit by an Iranian missile on the 5th, causing a fire. The fire has been fully contained, with no casualties reported, and refinery operations continue. An assessment of the damage is underway.

Qatar’s Ministry of Defense issued a statement on the 5th saying the country was targeted by missile attacks. A loud explosion was heard in Doha, and the Ministry subsequently issued a nationwide security alert, raising the security level.