US Strikes on Iran Send Oil Higher, Futures Lower, Rate-Hike Bets Jump

The United States struck targets in Iran, and the reaction across markets was immediate. Oil prices rose on the news, and futures tied to the Dow, S&P 500 and Nasdaq all fell. Traders also increased bets that the Federal Reserve will raise interest rates, a shift that ties the geopolitical event directly to the path of US monetary policy. The combination matters because higher oil prices feed into inflation, and a Fed already worried about prices has less room to look past a fresh energy shock. Defense contractor Babcock & Wilcox rallied on the same day, a sign investors are already positioning for a longer standoff rather than a one-off strike. What remains unresolved is whether Iran responds in a way that widens the conflict or disrupts oil shipping routes. Either would deepen the market reaction described here; a quick de-escalation would likely unwind it just as fast.