U.S. stock futures pointed to steep losses on Tuesday as investors eyed threats to world energy supplies from the Iran war. Oil prices surged on worries that the war could clog the global flow of crude.

S&P 500 futures are pointing to a decline of 1.5% at Tuesday's open, while the Dow Jones Industrial Average futures are indicating a 1.6% drop. On Monday, stocks had initially tumbled on concerns about the war's impact on energy prices, before rebounding and ending higher for the day as investors shrugged off those worries.

Benchmark U.S. crude rose $3.24 to $74.47 a barrel. Brent crude, the international standard, added $3.56 to $81.30 a barrel.

Stocks of airlines, including American Airlines, United and Delta, were some of Monday's biggest losers on Wall Street, and shares of all three slipped about 3% in Tuesday's premarket trading. Higher oil prices threaten the airlines' already big fuel bills, while the fighting in the Middle East has also closed airports and left travelers stranded.

"After initially taking the Middle East war in stride on Monday, market anxiety ratcheted higher overnight," said Adam Crisafulli, an analyst with Vital Knowledge, in a March 3 research note.

Investors are increasingly concerned that a "decapitated and leaderless Iranian government and military will execute a prolonged retaliatory response aimed at sowing chaos throughout the region by targeting key economic and energy infrastructure for weeks to come," he added.

Despite the retreats in many markets, the reactions to the war have been moderated by the fact that past military conflicts in the Middle East haven't caused long-term declines. For this war to knock down U.S. stocks in a significant and sustained way, the price of oil would perhaps need to jump above $100 per barrel, according to strategists at Morgan Stanley led by Michael Wilson.

"Since 2000, there have been 22 one-day oil price spikes of more than 10%," said Stephen Innes, managing partner at SPI Asset Management. "In other words, energy shocks do not automatically derail equities unless they are severe and sustained. The market is well aware of that playbook."

Asian airline stocks also tumbled, with ANA stock down 3.3% and Japan Airlines slumping 6.4%. Korean Air declined 10.3%, and Qantas Airways lost 1.8%.

Global stocks also tumbled on Tuesday, with France's CAC 40 dropping 2.2% to 8,207.10. In Germany, the DAX sank 2.9% to 23,935.62, while Britain's FTSE 100 declined 2.2% to 10,546.30.

Japan's benchmark Nikkei 225 sank 3.1% to finish at 56,279.05. Like other resource-poor countries in the region, Japan could be especially hit by the lack of access to the Strait of Hormuz, since much of its oil and natural gas imports are shipped through there.

In South Korea, a big energy importer, the Kospi plunged 7.2% as markets reopened after a holiday on Monday, closing at 5,791.91.

In currency trading early Tuesday, the U.S. dollar edged up to 157.53 Japanese yen from 157.47 yen. The euro cost $1.1627, down from $1.1692.

Japan's benchmark Nikkei 225 sank 3.1% to finish at 56,279.05. Like other resource-poor countries in the region, Japan could be especially hit by the lack of access to the Strait of Hormuz, since much of its oil and natural gas imports are shipped through there.


Israeli army and security forces conduct a search sweep of a house that was hit by Hezbollah projectiles in Moshav Kfar Yuval in northern Israel near the border with southern Lebanon on March 3, 2026. Jalaa MAREY/AFP via Getty Images

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