Futures lower as Middle East conflict sparks run for safe

By Shashwat Chauhan and National regular currency trading platformsAnkika Biswas

(Reuters) -U.S. stock index futures fell on Monday as a deepening conflict between Israel and the Palestinian Islamist group Hamas roiled global markets and pushed investors toward safe-haven assets, while crude prices jumped close to 4%.

Israel's troops were still fighting to clear out Hamas gunmen who killed 700 Israelis and seized hostages, even as the country responded with its heaviest ever bombardment of the Gaza Strip, killing about 500 people.

Israel has acknowledged that the battle was taking longer than expected, more than two days after the militants burst across the fence from Gaza on a deadly rampage.

U.S. Defense Secretary Lloyd Austin said the United States will send multiple military ships and aircraft closer to Israel as a show of support.

At 7:01 a.m. ET, were down 152 points, or 0.45%, were down 24.25 points, or 0.56%, and were down 109.5 points, or 0.72%.

The CBOE volatility index, Wall Street's "fear gauge," also rose to 19.10, reflecting investor anxiety.

Traditional safe-haven assets including gold and the U.S. dollar gained, while growing uncertainty pushed crude prices higher.

"We're seeing a classic safe-haven move, but I would suggest no real sign of panic yet," said Stuart Cole, chief macro economist at Equiti Capital.

"A lot will depend on whether the conflict spreads ... and any disruptions to oil supplies."

Energy companies, including (NYSE:), (NYSE:), (NYSE:) and Occidental Petroleum (NYSE:) jumped around 3% each in premarket trading.

United Airlines, Delta Air Lines (NYSE:) and American Airlines (NASDAQ:) suspended direct flights to Tel Aviv. Their shares were down more than 2% each.

Gold miner Newmont and U.S.-listed shares of Barrick Gold (NYSE:) rose 1.7% and 2.4%, respectively.

Defense companies (NYSE:), RTX, General Dynamics (NYSE:) and (NYSE:) advanced between 2.9% and 4.7%.

The U.S. bond market was shut on Monday for Columbus Day.

Major technology stocks including Apple (NASDAQ:), Meta Platforms (NASDAQ:), Alphabet (NASDAQ:) and Amazon.com (NASDAQ:) dipped 0.9% to 1.2%.

Chip stocks Intel (NASDAQ:), Nvidia (NASDAQ:), Qualcomm (NASDAQ:) and Advanced Micro Devices (NASDAQ:) also lost between 1.0% and 2.2%.

The Nasdaq and the posted weekly gains on Friday as mixed jobs reports kept investors on edge around the Federal Reserve's interest rate outlook.

For the week, key inflation readings including September's producer price and consumer price indexes, as well as the Fed's September meeting minutes will be in focus.

Later on Monday, investors will keep an eye on speeches by Fed Vice Chair Philip Jefferson and Vice Chair for Supervision Michael Barr.

Focus will also be on the upcoming quarterly earnings from major banks including JPMorgan Chase (NYSE:), Wells Fargo, (NYSE:) as well as asset manager BlackRock (NYSE:).

Tesla (NASDAQ:) shed 1.7% as data showed the company's China-made EV sales volume for September decreased 10.9% from a year ago.

Disney gained 0.8% on a report Nelson Peltz's Trian Fund Management has increased its stake in the media giant, with the activist investor expected to request multiple board seats, including for himself.

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