Spiking oil prices could weigh on stocks and the economy

Oil prices jumped after US strikes on Iran and subsequent retaliatory missile attacks, sending Brent up roughly 7% and triggering volatile trading in US markets as the S&P 500 and Nasdaq swung from losses to gains. Goldman Sachs analysts called the energy-market impact the primary influence the conflict will have on the global economy and markets.

Higher energy costs are a direct headwind for equities because they raise expenses for companies that move physical goods, potentially squeezing earnings. Goldman noted that cyclical, consumer-facing sectors such as airlines and industrials are especially at risk, while energy producers and some mining and metals names could outperform.

Morgan Stanley said crude rising above $100 a barrel would materially alter its bullish view for stocks this year. A renewed spike in oil could also reignite inflation and complicate the Federal Reserve's plans for rate cuts.

United States, Iran

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