Iran’s Supreme Leader Ayatollah Ali Khamenei is dead, said President Trump on Saturday, in a social-media post
Stocks could see a difficult start to March, given the cloud of uncertainty around the Iran conflict and AI jitters sweeping through markets.
Brent crude oil could hit $100 a barrel because of supply threats and a “spiraling security situation” in the Middle East, according to Barclays.
President Trump said Saturday that Iran's Supreme Leader Ayatollah Ali Khamenei was killed by U.S.-Israel strikes, in a social-media post, which repeated his call for Iranians to take back their country.
"The heavy and pinpoint bombing, however, will continue, uninterrupted throughout the week or, as long as necessary to achieve our objective of PEACE THROUGHOUT THE MIDDLE EAST AND, INDEED, THE WORLD!" Trump wrote.
Rapidly evolving developments in the Middle East over the weekend have raised questions about how long this conflict will last - and whether it risks sweeping up more oil-producing nations.
The conflict follows a brief U.S.-Israel military operation in June that was targeted against Tehran's nuclear facilities.
"This is different," said Ali Meli, founder and chief investment officer at Monachil Capital Partners, in a Saturday interview with MarketWatch. "There's a belief that this may be more aimed at regime change, beyond nuclear deterrence."
'[T]he question is if there will be a version of regime change like in Venezuela, or something more radical.'Ali Meli, Monachil Capital Partners
"Now, the question is if there will be a version of regime change like in Venezuela, or something more radical," said Meli.
What happens in the next 24 to 48 hours may provide clues to the potential scope of this conflict and its likely impact on markets, with Iran's oil infrastructure and the region's Strait of Hormuz, a critical oil chokepoint, now a major focus. That waterway connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. There were reports Saturday of Iran threatening to limit passage through the waterway.
Oil (CL.1) (BRN00) prices jumped on Friday as traders began to sense strikes were nearing, as Trump suggested to reporters that the window for diplomacy with Iran could be closing.
"The brief June 2025 conflict is a poor guide to what is likely to follow," said Nick Redman, analyst at Oxford Analytica, a geopolitical risk-analysis and advisory service owned by MarketWatch publisher Dow Jones. "Then, Iran sought to avoid confrontation because it understood U.S. objectives were limited, meaning that regional relations and wider international legitimacy were worth preserving."
European leaders from Britain, France and Germany issued a statement Saturday saying their countries had not taken part in the Iran strikes, but they added that they had been in close contact with the U.S., Israel and partners in the region. They called for a resumption of negotiations, the Associated Press reported.
"Clearly, there are more questions than answers in this first day of this," Ryan Detrick, chief market strategist at the Carson Group, told MarketWatch. "But there are valid concerns that this could become a larger issue than in June."
Detrick said he's bracing for near-term weakness in equities, a likely spike in crude oil and for gold and other safe-haven assets to rise. "At the same time, the U.S. economy is still strong, and it's been a strong earnings season," he said, adding those factors as being a support for equity prices.
Brent crude (BRN00) prices, the global oil benchmark, could hit $100 a barrel because of the threat of "a spiraling security situation" and supply disruptions out of the Middle East, according to Barclays analysts. Prices were near $73 a barrel Friday.
Away from oil jitters, investors endured a violent rotation under the surface of the stock market in February, with investors looking for cover from artificial intelligence disruptions and cracks in credit.
That could spell a difficult start to March for stocks, plus the "black cloud overhead" from the Iran conflict, said Detrick at the Carson Group. "To think we are going to have a calm start to March probably isn't on anyone's bingo card."
Should a longer, more complicated conflict unfold, the U.S. could tap its Strategic Petroleum Reserve in an effort to keep a lid on oil and gasoline prices. U.S. benchmark crude shot up to over $130 a barrel in 2022 after Russia's full-scale invasion of Ukraine.
However, the U.S could look to quickly ramp up domestic production given its shale resources, and it also now exerts control over Venezuela's oil, Meli at Monachil Capital said. That may help keep crude prices in a range, he added.
Gold (GC00) jumped nearly 11% in February, finishing at $5,230.50 an ounce on Friday. That marked gold's biggest one-month percentage gain since January 2012, and its monthly gain of $516.60 was the biggest one-month net gain on record, according to Dow Jones Market Data.
Cryptocurrencies, which trade 24/7, offered the first glimpse at how investors might react as they wait for Asian markets to open on Sunday. Bitcoin (BTCUSD) was under pressure around $65,300.
The S&P 500 SPX and Nasdaq Composite COMP and Dow industrials DJIA closed lower Friday, but with the S&P 500 less than 2% off record levels.
The Japanese yen (USDJPY), Swiss franc (USDCHF) and U.S. Treasurys BX:TMUBMUSD10Y BX:TMUBMUSD30Ycould be in the outperformer category. Investors have been increasingly pushing into U.S. government debt recently, a move strategists have attributed to fears over AI threats to employment and economic growth.
Trump, addressing Iranians in a video address earlier on Saturday, said, "Now is the time to seize control of your destiny." White House press secretary Karoline Leavitt indicated that congressional notification was provided before the attack, in a social-media post.
Iran, with which the U.S. under President Barack Obama had negotiated a nuclear pact that Trump canceled during his first White House term, ranks among the world's biggest oil producers.
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