U.S. markets edged lower on Friday morning after the Defense Department confirmed that an airstrike killed an Iranian top military official.
The Dow Jones Industrial Average plunged by 224 points or 0.78% shortly after the opening bell. The S&P 500 Index edged lower by 19.87 points or 0.67%, while the Nasdaq Composite fell by 60.50 points or 0.67%.
The U.S. announced that it had killed Gen. Qasem Soleimani, in Baghdad in an airstrike. Soleimani had been a key role in Iranian politics and his death raised concerns over a potential retaliation from Iran.
Iranian Foreign Minister Mohammad Javad Zarif warned on Friday that Iran would retaliate against the U.S. for the airstrike.
“It’s a game-changer,” Dryden Pence, chief investment officer at Pence Wealth Management, told CNBC’s “Squawk Box” on Friday. “We now have vast, broader array of weapons systems that the president has at his disposal. We’ve been able to weaponize economic sanctions now where we can go after individuals … but now I think the ultimate sanction that the president is able to use is an airstrike.”
While markets edged lower, oil prices surged over concerns regarding an energy shock on the global economy, according to CNBC. U.S. crude oil February futures gained USD 2.09 or 3.42%, reaching USD 63.27 per barrel.
“Global oil markets will be volatile for weeks to come,” said Greg Valliere, chief U.S. policy strategist at AGF Investments, in a note, according to CNBC. “There’s a reason, finally, for caution in the stock market.”
Generally, during times of economic uncertainty and volatility, gold prices soar as investors seek precious metals as a safe haven. Gold futures jumped by 1.28% to USD 1,547.60 per ounce.
Airline stocks plunged amid the news of the airstrike. Notably, American Airlines (NASDAQ: AAL) witnessed the sharpest decline, falling by 5.29% on Friday. United Airlines (NASDAQ: UAL) fell by 3.1%, Delta Air Lines (NYSE: DAL) dropped by 2.3%, JetBlue Airways (NASDAQ: JBLU) slipped by 3.4%.