US defense stocks surge amid Israel-Hamas war
What's the story
As the conflict between Israel and Hamas intensifies, defense stocks in the United States (US) are seeing remarkable growth.
Companies like Northrop Grumman Corp, L3Harris Technologies Inc., Huntington Ingalls Industries Inc., Lockheed Martin Corp., and General Dynamics experienced up to 11.4% increase in their shares on Monday, the largest gain in over three years.
Insights
Aerospace & Defense Index records best day since November 2020
In US trading, the S&P 500 Aerospace & Defense Index had its best day since November 2020, rising by 5.6%.
Northrop Grumman Corp. was up by 11.43%, L3Harris Technologies Inc. witnessed a 9.96% increase, Huntington Ingalls Industries Inc. rose by 9.34%, Lockheed Martin Corp. gained 8.93%, and General Dynamics Corp. ended by 8.43% higher.
Details
Global impact on Israel-connected businesses
The ongoing conflict is also impacting global businesses with ties to Israel, especially in the tech sector.
Chipmakers and software providers have seen their shares drop as investors worry about potential effects on companies like Intel Corp., which plans to build a new manufacturing plant in Israel.
Cybersecurity stocks, such as Check Point Software Technologies Ltd. and Datadog Inc., have also seen a decline in their share prices.
What Next?
Airline stocks slide as flights to Israel halted
The airline industry hasn't been immune to the conflict's effects, with several companies suspending flights to Israel.
The Bloomberg World Airlines Index fell 2.6%, its largest one-day drop since March.
Major airlines like Delta Air Lines Inc., United Airlines Holdings Inc., and American Airlines Group Inc. have all canceled services to Tel Aviv, causing their shares to fall by more than 4%.
European and Asian carriers have followed suit, further impacting the industry.
Insights
Oil prices rise as conflict intensifies
While Israel isn't a major oil producer, the conflict has led to a rise in oil prices due to concerns about potential unrest in the oil-rich Middle East region.
Brent crude soared as high as 4.94% to $88.76/barrel on Monday, while shares of oil producers such as Australia's Woodside Energy Group, Santos, Shell, BP, Exxon Mobil, and Chevron experienced gains.
However, Energean, a natural gas producer with assets off the coast of Israel, saw its shares fall 18% in London.
Facts
Gold prices surge amid turmoil
In times of geopolitical uncertainty, investors often seek safe-haven assets, leading to an increase in gold prices.
Asian gold miners like Australia's Newcrest Mining Ltd. have seen their shares rise due to the heightened demand for the precious metal.
The ongoing conflict between Israel and Hamas continues to influence global markets, with investors keeping a close eye on the situation for potential impacts on various industries.