By Andrew Moran

U.S. stocks fell and crude oil prices surged at the March 2 opening bell as investors reacted to the joint U.S.–Israel strikes on Iran, concerned over instability in the Middle East.

The blue-chip Dow Jones Industrial Average fell by more than 500 points, or about 1.1 percent. The tech-driven Nasdaq Composite Index dropped by nearly 400 points, or 1.4 percent. The broader S&P 500 fell by 1.2 percent.

Crude oil and natural gas prices added to their overnight gains to kick off the trading week.

West Texas Intermediate oil prices advanced by $5.19, or 8 percent, to above $72 per barrel on the New York Mercantile Exchange at 9:30 a.m. ET.

Brent, the international benchmark for crude prices, also extended its rise overseas. A barrel of Brent climbed by $6, or 8.5 percent, to around $79 a barrel.

Natural gas prices popped after an initial muted response. The energy commodity surged by 4 percent to around $3 per million British thermal units (Btu).

Qatar’s state-owned energy company—QatarEnergy—said it had stopped liquefied natural gas production after Iran attacked its operating facilities.

“Due to military attacks on QatarEnergy’s operating facilities in Ras Laffan Industrial City and Mesaieed Industrial City in the State of Qatar, QatarEnergy has ceased production of liquefied natural gas (LNG) and associated products,” the company stated on March 2.

About one-fifth of the world’s liquefied natural gas exports originate in the Gulf, with Qatar accounting for the majority of shipments.

While the risks for stocks and oil prices remain high, a growing chorus of market watchers does not anticipate current conditions to linger.

“In the near term, the market reaction should be 1) Higher oil and energy prices (including gold) and 2) Lower stock prices on rising geopolitical risks,” Tom Essaye, president and co-founder of the Sevens Report Research, said in a note emailed to The Epoch Times.

“However, based on current expectations (namely that the operation is limited to mostly air attacks and lasts only a short time), I do not think the conflict will create sustainably higher oil prices or be a material negative on stocks.”

One reason oil prices may not continue to rise is that Iran is a marginal producer in global energy markets, with output at about 3.3 million barrels per day and exporting 1.5 million.

Another factor is that transit through the Strait of Hormuz has effectively been shuttered, as tankers will avoid the area for the foreseeable future. An estimated 20 million barrels of crude pass through the area daily, with most of the shipments directed toward Asia.

Shipping titan Maersk said that it would pause vessel crossings in the Strait of Hormuz.

“The safety of our crews, vessels and customers’ cargo remains our key priority and we will continue to monitor the situation closely and take all needed actions,” the company said in a March 1 statement.

“We remain committed to minimising the impact on our customers’ supply chains and will continue to keep them updated on the situation.”

The current global environment has ample oil supplies, especially given that the United States produces record amounts of oil.

“And, without any sustainable increase in oil prices, the conflict is unlikely to impact stocks because there won’t be any significant knock-on effects to higher inflation or weaker margins,” Essaye said.

Heating oil futures advanced by almost 15 percent, and gasoline futures jumped by 5 percent.

Finding Shelter

For now, Middle East tensions are sending capital toward safe-haven assets, mainly gold and the U.S. dollar.

An ounce of gold advanced by 3 percent to close at $5,400. Silver prices slipped by more than 2 percent to above $91 an ounce.

The U.S. dollar index, a measure of the greenback against a weighted basket of currencies such as the Japanese yen and British pound, increased by 0.8 percent, wiping out its year-to-date loss.

Yields for U.S. Treasury securities ticked higher across the board. The benchmark 10-year remained below 4 percent, while the 30-year yield firmed above 4.64 percent.

“Overall, this week was supposed to be focused on the latest US jobs figures and a few more earnings—primarily from Broadcom and Alibaba. But the geopolitical headlines are likely to be the biggest driver of prices during what promises to be a highly volatile week,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a note emailed to The Epoch Times.

A flurry of employment data will be released in the coming days, with the February jobs report being the main event on March 6.

Early estimates suggest the U.S. economy created 60,000 new jobs last month, while the unemployment rate was unchanged at 4.3 percent.

January retail sales, fourth-quarter labor productivity, and trade prices will also come out.

“This report will test whether the job market can keep its low fire resilience while navigating AI-driven restructuring and tariff-related inflation pressures. At stake is household financial stability and, ultimately, the durability of the nation’s economic expansion,” Mark Hamrick, senior economic analyst at Bankrate, said in a statement to The Epoch Times.