Global Markets Brace as US Bombs Iran Nuclear Sites, Oil Prices Surge; Tesla Unveils Robotaxi Service

The global financial landscape began the week on a cautious note, with Dow Jones futures, S&P 500 futures, and Nasdaq futures all retreating modestly Sunday night. This market jitters come in the immediate aftermath of a significant escalation in the Middle East, as President Donald Trump announced the United States had conducted strikes on Iran's nuclear facilities, committing the U.S. military to Israel's ongoing conflict with Iran. Compounding the news cycle, electric vehicle giant Tesla made headlines by launching its long-anticipated robotaxi service in Austin, Texas, on Sunday.

The stock market had a narrowly mixed performance last week, remarkably holding relatively steady despite the intensifying news from the Israel-Iran conflict. Amid this sideways trading, certain stocks like Viking (VIK), Dell (DELL), Super Micro (SMCI), and Shake Shack (SHAK) are currently positioned in potential "buy areas" for investors closely watching market indicators.

Oil Markets React to Escalation

Crude oil futures saw a notable upswing Sunday night, climbing nearly 2% with West Texas Intermediate (WTI) trading around $75 a barrel. This surge continues a trend that has seen crude prices jump almost 14% since Israel initiated its attacks on Iran. The immediate spike followed President Trump's declaration on Truth Social that the U.S. had "completed our very successful attack on the three Nuclear sites in Iran, including Fordow, Natanz, and Esfahan." He added, "NOW IS THE TIME FOR PEACE!"

In a brief address on Saturday night, Trump stated the objective was the "destruction of Iran's nuclear enrichment capacity and a stop to the nuclear threat." He further warned of striking "other targets with precision, speed and skill" if peace wasn't quickly achieved.

While Chairman of the Joint Chiefs of Staff Dan Caine indicated "severe damage and destruction" from the barrage of GBU-57 "bunker buster" bombs and Tomahawk cruise missiles, initial Israeli military analysis, as reported by the New York Times, suggested "serious damage" but not complete destruction of the sites. Iran, for its part, has declared it reserves "all options" in response to the "outrageous" attack, having previously asserted its targeted uranium was protected.

A significant concern for oil markets remains the Strait of Hormuz. Iran's state TV reported that its parliament approved a measure to close the vital waterway, through which a staggering 15% of global oil and 20% of liquefied natural gas exports pass. While past threats to close the strait haven't materialized, the current elevated tensions amplify the risk. Analysts note that while alternative pipelines exist, a closure would still disrupt substantial crude volumes. The U.S. has positioned considerable military assets in the region, signaling a readiness for further response if the Strait is affected. The potential for Iranian "asymmetric retaliation" against U.S. bases in the region also looms large.

Tesla's Robotaxi Debut in Austin

Shifting focus to the tech world, Tesla officially commenced its much-anticipated robotaxi service in Austin, Texas, on Sunday afternoon. The service, currently invite-only, is offering rides to select enthusiasts for a flat rate of $4.20, with a human "safety monitor" present in the passenger seat for all rides. This move is critical for Tesla, as CEO Elon Musk and investors have heavily bet on the success of robotaxis to drive the company's future growth amidst a slowdown in EV sales and a limited pipeline of new vehicle models.

The launch could significantly impact rival Uber Technologies (UBER), which is currently near an aggressive entry point and could see its stock swing based on the success and broader adoption of Tesla's robotaxi service. Tesla stock dipped 1% last week, trading around its 21-day moving average and holding above its 200-day line. The market will closely watch Monday's trading to gauge initial reactions to the robotaxi rollout.

Market Overview and Investment Strategy

Last week, the broader stock market rally demonstrated resilience despite the unfolding geopolitical drama. The Dow Jones Industrial Average saw a fractional gain, while the S&P 500 dipped 0.15% and the Nasdaq composite edged up 0.2%. The small-cap Russell 2000 also climbed 0.4%. The major indexes currently hover near the lower end of their recent trading range, with the Nasdaq and S&P 500 still above their 21-day moving averages and not far from record highs.

Amid this sideways movement, some leading stocks have shown strength, while others have pulled back. Notably, speculative growth names have seen significant runs. The 10-year Treasury yield fell five basis points to 4.37%, while U.S. crude oil futures rose 2.7% last week, to $74.93 a barrel.

In the ETF space, the Innovator IBD 50 ETF (FFTY) gained 3.1% last week, while the iShares Expanded Tech-Software Sector ETF (IGV) fell 1.1%, and the VanEck Vectors Semiconductor ETF (SMH) climbed 1.3%. ARK Innovation ETF (ARKK), with Tesla as its largest holding, vaulted 8.9% last week, briefly hitting a three-year high. Sector-specific ETFs also saw mixed performance, with Energy Select SPDR ETF (XLE) rising 1% and the Industrial Select Sector SPDR Fund (XLI) dipping 0.2%.

Stocks in Focus:

♦ Dell Technologies (DELL): Jumped nearly 9% last week, clearing an aggressive entry of 116.97.

♦ Super Micro (SMCI): Leaped 9.05% last week, topping an aggressive entry of 44.72.

♦ Shake Shack (SHAK): Rallied 7.5%, clearing an alternate handle buy point of 131.38.

♦ Viking (VIK): Gained 6.3%, moving back above its 48.58 cup-with-handle buy point.

Market veteran Ajay Bagga suggests that while "Iranian asymmetric retaliation is a big risk" leading to volatility, "geopolitical conflicts historically represent good buying opportunities." He advises investors to keep "some cash ready to deploy systematically if markets react downwards."

As the stock market navigates these complex geopolitical and technological developments, investors are advised to remain vigilant. While the market has held up, caution is warranted for new purchases until the major indexes clear their current mini-range, especially with the S&P 500 and Nasdaq potentially undercutting their 21-day moving averages at Monday's open. Focus on building strong watchlists and preparing exit strategies.