Looking at the US Stock Market After Trump's Iran Missile: An Analysis

The U.S. stock market reacted with surprising calm following President Trump’s airstrikes on Iran’s nuclear facilities, raising questions about how geopolitical events influence financial markets. On June 23, 2025, after the military action, major indices showed muted reactions, signaling caution among investors. 

Despite an initial spike in oil prices and some volatility, the stock market seems to treat this as a contained incident rather than a larger, escalating conflict. Let’s break down the key market movements and what this means for investors going forward.

Read also : Iran Strikes Back After US Missile Launch: Israel Back in Crumbles

Immediate Market Reactions: How Did the US Stock Market Open?

Following President Trump’s military strikes on Iranian nuclear sites, U.S. equity markets opened with minimal movement. Futures trading on major stock indexes like the Dow Jones Industrial Average, S&P 500, and Nasdaq showed slight gains, signaling investor caution rather than panic. Here’s a closer look at how the markets performed on the morning of June 23, 2025:

Stock Market Performance

• Dow Jones Industrial Average futures rose by 0.1%, suggesting a potential 40-point gain at the market open.
• S&P 500 futures increased by 0.3%, indicating optimism, particularly in sectors like technology.
• Nasdaq-100 futures jumped by 0.4%, led by strength in tech stocks, which are often less sensitive to geopolitical tensions.

Oil Price Impact

• Oil futures initially surged over 4%, driven by concerns about potential supply disruptions through the Strait of Hormuz. However, the price later eased to under 1%, reflecting reduced fears of prolonged oil price hikes and inflation concerns.

While geopolitical instability typically leads to sharp market reactions, these initial movements show that investors are treating this situation with caution—awaiting further developments rather than jumping into drastic market adjustments.

Sector Responses: Who Benefited and Who Struggled?

While the overall stock market showed resilience, some sectors responded more dramatically to the geopolitical events. Here’s a breakdown of how key sectors reacted:

Energy and Commodities

• Oil Majors like ExxonMobil and Chevron saw their stock prices rise by 1-2%, reflecting renewed concerns about supply disruptions and the potential for a tighter oil market.
• Crude Oil Prices saw a sharp spike initially, with Brent Crude reaching near $80 per barrel before settling at $77, while WTI crude followed a similar pattern, briefly hitting $77 before easing back to $74.

Defense Contractors

• Defense Stocks, such as Lockheed Martin, Northrop Grumman, and Raytheon Technologies, saw gains between 0.8-1.3%. These companies tend to perform well in times of geopolitical tension, as military spending is often expected to rise during conflicts or heightened military readiness.

Safe-Haven Assets

• Gold Prices saw a slight dip despite the typical safe-haven demand. This suggests that investors are not overly concerned about the immediate escalation of the conflict.
• Treasury Yields showed little movement, with 10-year U.S. Treasury yields hovering around 4.39%, indicating that the bond market was not yet panicking.
• The U.S. Dollar Index strengthened by about 0.6%, supported by oil price dynamics and safe-haven flows.

Volatility and Investor Sentiment: A "Wait-and-See" Approach

Investor sentiment after the U.S. airstrike was cautiously optimistic. The CBOE Volatility Index (VIX), which measures market volatility, remained near neutral levels, suggesting that traders are not overly concerned about immediate market turmoil. Instead, there seems to be a sense of “wait-and-see” as investors digest the implications of the strike and await any potential retaliation from Iran.

Volatility and Risk Appetite

• The VIX, which often spikes during times of geopolitical uncertainty, stayed relatively subdued.
• Market commentators have highlighted that this muted response indicates a sense of contained risk, with many investors waiting for more clarity before making significant moves.

Historical Context: Similar Market Reactions

Historically, military engagements in the Middle East have often led to brief market dips followed by rapid stabilization when fears of broader escalation are mitigated. This pattern suggests that, as long as tensions do not spiral into a more extensive conflict, the market will likely recover quickly, much as it did after previous military exchanges in the region.

The Impact of Oil Prices on the Stock Market

The relationship between oil prices and the stock market is crucial to understanding how geopolitical events impact financial markets. Here’s how the oil price shock from the U.S. missile strike affected the broader market:

1. Immediate Impact on Energy Stocks

• ExxonMobil and Chevron gained between 1-2% as the spike in oil prices fueled expectations of higher profits from these major players in the energy sector.
• However, this was a short-term reaction, as the oil price rally soon fizzled out, with prices settling lower. This reflects the market’s uncertainty about the longevity of oil price increases amid the possibility of further geopolitical tensions.

2. Inflation Concerns and Market Volatility

• The spike in oil prices raised fears about inflation, which in turn affected rate-sensitive sectors, like technology and consumer discretionary stocks. These sectors tend to underperform when oil prices rise because higher energy costs can squeeze profit margins.

3. Correlation Between Oil Prices and Equities

• Oil price volatility remains a key driver of broader equity market movements. If the oil price surge continues, there’s a possibility of increased volatility in the S&P 500, particularly in financials, which are heavily influenced by energy-related credit risks.

Looking to trade cryptocurrencies securely? Bitrue offers a reliable platform for buying, selling, and holding digital assets. Sign up today to access a wide variety of coins, including Zoro Inu, and manage your portfolio with ease.

Read also : Oil prices skyrocket in Asia-Pacific region after Hormuz Strait closure

Conclusion: What’s Next for the US Stock Market?

After the U.S. missile strikes on Iranian nuclear facilities, the stock market showed resilience rather than panic. While oil price volatility and sectoral shifts were evident, overall market reactions were muted, with investors opting for a “wait-and-see” approach. If the situation in the Middle East remains contained, we could see a market rebound, with energy stocks continuing to benefit from short-term oil price increases.

However, should tensions escalate, we may see increased volatility, particularly in energy and technology sectors. For now, cautious optimism seems to be the theme, and investors will need to stay vigilant as the situation unfolds.

FAQ

How did the U.S. stock market react to Trump’s airstrikes on Iran?

The stock market showed muted reactions, with major indices showing modest gains. Oil prices surged briefly, but markets treated the strike as a contained incident.

Why did oil prices spike after the U.S. airstrikes?

Oil prices spiked due to fears of supply disruptions, particularly through the Strait of Hormuz, which is crucial for global oil shipments. However, prices later eased.

What sectors benefitted from the geopolitical tension with Iran?

Energy stocks like ExxonMobil and Chevron saw gains, while defense contractors also performed well. Technology stocks, however, faced downward pressure due to inflation concerns.