Futures point to more losses
U.S. stock index futures pointed to a sharply lower open on Monday after a dramatic escalation of tensions between Washington and Tehran following the killing of Qasem Soleimani, a top Iranian military leader.
Soleimani was killed in a U.S. airstrike last week near Baghdad airport in an attack okayed by President Donald Trump, who said the military commander had been planning an “imminent” attack on American troops and diplomats in Iraq.
Iran has vowed to exact “severe revenge” on the U.S. for the killing of Soleimani. Iranian officials have also declared that they will no longer abide by any of the commitments the country made in the landmark 2015 nuclear deal that limited the its enrichment of uranium.
At the same time, lawmakers in Iraqi have passed a resolution seeking to force American troops to leave the country.
Trump on the other hand has threatened “very big sanctions” on Iraq if the country expels the troops and warned that he would target Iranian cultural sites if Iran strikes U.S. assets.
At 4:30 a.m. ET, the blue-chip Dow futures were seen dropping 229 points, or 0.80% to 28,373. The S&P 500 futures declined 25.62 points, or 0.79% to 3,209.88 while the tech-heavy Nasdaq 100 futures were down 82.50 points, or 0.94% to 8,727.50.
Oil continues to move higher on Middle East tensions
Oil futures rose to their highest level for the first time in more than three months on Monday morning, as fears of a military conflict between the U.S. and Iran continued to grip the markets.
By 4:30 a.m. ET, U.S. West Texas Intermediate crude futures were up $0.84, or around 1.33%, at $63.89 per barrel. International Brent crude oil futures were at $69.70 a barrel, up $1.10, or about 1.6%.
France warns U.S. over digital tax retaliation
Elsewhere, Reuters is reporting that French Economy Minister Bruno Le Maire has warned the Trump administration that any retaliation to French new digital services tax “could deeply and durably affect the transatlantic relationship.”
“If the Americans decide to go ahead and impose sanctions…in this case we would retaliate,” the publication quoted Le Maire as telling France Inter radio.
The U.S. has vowed to slap import taxes on $2.4 billion worth of French products, including handbags, cheese, champagne, and make-up. Last year, U.S. Trade Representative Robert Lighthizer said the digital tax would unfairly target American tech giants like Amazon (NASDAQ: AMZN) and Facebook (NASDAQ: FB).
