Stock futures tumbled on Monday after the U.S. and Israel attacked Iran over the weekend, causing oil prices to surge and adding an unstable Middle East to a list of growing worries for equity investors. Futures on the Dow Jones Industrial Average dropped 576 points, or 1.2%. S&P 500 futures lost 1.1%, and Nasdaq 100 futures declined 1.4%. Gold futures jumped nearly 3% as investors piled into the global safe-haven asset. The CBOE Volatility Index, Wall Street’s fear gauge based on option prices used to hedge against losses, jumped to the highest levels of 2026 so far. The joint U.S.-Israeli strikes killed Supreme Leader Ayatollah Ali Khamenei over the weekend, marking a watershed moment for the Islamic Republic and one of its most consequential episodes since 1979. President Donald Trump told CNBC’s Joe Kernen that U.S. military operations in Iran are “ahead of schedule,” but investors are worried about a prolonged conflict despite those comments. Iranian officials have vowed a forceful retaliation, raising fears the conflict could spread across the region. “The tail risk of a sustained conflict is higher than in 2024 or 2025, though we don’t see this war escalating to a point where it drastically changes the US outlook,” said Barclays’ Ajay Rajadhyaksha in a note. But he said early this week, “is too early to buy any dip, especially with investors used to a pattern of quick de-escalation.” U.S. crude prices jumped almost 8% as investors worried the confrontation could spiral into a broader war that disrupts supplies. Iran is the fourth-largest oil producer in OPEC. The oil market’s trajectory may hinge on whether fighting disrupts traffic through the Strait of Hormuz, the world’s most important chokepoint for crude flows. A sustained interruption there could reverberate through global energy markets and reignite inflation pressures. “Broader uncertainty suppresses investor sentiment, which can broadly weigh on risk-assets globally,” said Adam Hetts, global head of multi-asset at Janus Henderson. “In a prolonged period of uncertainty, increases in oil prices could generate a global inflationary scare.” Northrop Grumman advanced 5% in early trading following the attacks, while fellow defense stocks RTX and Lockheed Martin were higher by more than 6%. Energy shares including Exxon Mobil and Chevron were up by about 4% apiece. But a risk-off mentality sent most stocks lower with tech and banking shares leading the losses. Broadcom led chip stocks lower. Amazon and Alphabet fell. Morgan Stanley and Goldman Sachs were lower. The geopolitical escalation compounds an already fragile backdrop for stocks. The S&P 500 sold off Friday and finished in the red for February amid renewed turmoil in artificial intelligence and software shares. Fears that automation may erode business models and trigger mounting layoffs have weighed on sentiment, raising concerns about spillover effects on the broader economy. “All told, we presume a shorter-term impact, but can’t rule out a more protracted friction to equities,” said Citi equity strategists in a note to clients about the Middle East conflict. “We also need to bucket this new volatility event alongside a growing list of concerns. Namely, the AI spending boom seems poised to persist, but the productivity promise is quickly facing off against AI-triggered business-model disruption.” U.S. Treasury yields moved higher on Monday even after the U.S. and Israel launched attacks on Iran over the weekend as investors failed to use the U.S. bond market as a safe haven. The benchmark 10-year Treasury yield rose more than 1 basis point to 3.981%. The 30-year Treasury bond also added more than 1 basis point to yield 4.647%. The yield on the 2-year Treasury note was up more than 4 basis points at 3.422%. Airline stocks led losses in Asia on Monday as Middle East airspace disruptions and airport closures unsettled travel markets, while higher oil prices lifted energy shares amid escalating conflict in Iran. Japan’s Nikkei 225 slipped 1.35% to 58,057.24, paring earlier losses, while the Topix fell 1.02% to 3,898.42. Hong Kong Hang Seng index was down 2.14% to close at 26,059.85, leading losses in Asia, while mainland China’s CSI 300 was up 0.38% and closed at 4,728.67, bucking the wider downtrend. Australia’s S&P/ASX 200 was up marginally to 9,200.9, with gains in its oil and gold mining sectors offsetting its losses. Crude oil prices jumped more than 7% on Monday, as market participants fear war between the U.S. and Iran will spiral out of control and lead to a major supply disruption. U.S. crude oil rose 7.4%, or $5, to $72.02 per barrel by 6:09 a.m. ET. Global benchmark Brent jumped about 5%, or $5.46, to $78.37. Gold prices rose on Monday, as U.S.-Israel strikes on Iran that killed Supreme Leader Ayatollah Ali Khamenei ​over the weekend stoked ​fears of a wider ​conflict and added to global economic uncertainty, triggering a rush to safe havens. Spot gold gained 2% to $5,383.49 an ounce, after hitting a more than ⁠four-week ‌high earlier in the session. The metal hit ⁠a record high of $5,594.82 on January 29. U.S. gold futures rose 2.9% to $5,399.70 per ounce. “What we’re seeing is an increase in safe-haven assets, which is reflected in the gains in gold and also ‌reflected in the losses of risk related assets, such as stocks,” said ActivTrades analyst Ricardo Evangelista.