U.S. stock futures plunged and oil prices spiked as renewed conflict between Iran and the U.S.-Israel alliance threatened to destabilize the Middle East. Energy markets reacted sharply to fears of disruptions through the Strait of Hormuz, with crude oil climbing on heightened safe-haven demand. The attacks, which killed several high-ranking Iranian officials including Supreme Leader Ayatollah Ali Khamenei, have triggered retaliatory strikes across the region.

Wall Street analysts are scrambling to assess the economic fallout. Deutsche Bank's Helen Belopolsky warned of potential strikes on oil refineries, ports, and pipelines to exacerbate Iran's economic crisis. RBC Capital's Lori Calvasina noted that both the S&P 500's choppiness this year and Energy sector outperformance reflected heightened geopolitical risk. BofA Securities analysts emphasized that the current situation carries greater disruption risk than previous conflicts.

Market strategists are particularly concerned about stagflation risks. BofA analysts including Claudio Irigoyen and Antonio Gabriel estimate oil could rise $10-$15 per barrel in their baseline scenario, but warn tail risks are much larger than in 2025. Barclays analysts highlighted that European and emerging market equities near recent highs remain vulnerable with an unclear conflict endgame. Raymond James analysts predict hostilities will remain active for several weeks, with U.S. military capabilities to sustain operations coming into question beyond that timeframe.