Stock futures were mixed Sunday evening and oil prices continued to climb as the deaths of American service members over the weekend added more fuel to the U.S.-Iran war.
Futures tied to the Dow Jones industrial average fell 61 points, or 0.12%. S&P 500 futures were down just 0.05%, but Nasdaq futures were up 0.08%.
West Texas Intermediate futures rose 2.75% to $84.76 a barrel, and Brent crude climbed 3.2% to $90.92. Gold dropped 0.53% to $3,997 per ounce.
Two U.S. troops died in Jordan from an Iranian attack, and another was missing. A third service member was killed in Iraq while attempting to dispose of a downed Iranian drone.
The deaths at the hands of the Islamic Republic would appear to cross a red line that President Donald Trump had reportedly described when he considered the threshold for ending the earlier ceasefire before signing last month’s memorandum of understanding, which has since collapsed.
So far, the White House hasn’t announced whether all-out war will resume. But the U.S. military is continuing its daily bombardment of Iran, with the latest salvo meant as punishment for those killed in action.
But despite more than a week of airstrikes, the U.S. military has failed to secure an alternate corridor through the Strait of Hormuz that bypasses Iran’s approved route, as the regime’s drones and missiles scare away commercial vessels.
Ship-tracking data shows no crossings via the U.S.-backed route, and no “shadow fleet” movements either, while Iran’s channel is still seeing activity.
That gives Tehran even more leverage as global oil stockpiles keep dwindling toward critically low levels. At the same time, Iran may be deploying more advanced weapons that can evade U.S. air defenses, making bases around the Persian Gulf more vulnerable.
As a result, Trump’s military options are narrowing as the U.S. military has already failed to oust the Iranian regime or break its hold over the Strait of Hormuz.
Retired Adm. James Stavridis, who served as NATO Supreme Allied Commander, told CNN on Sunday that Trump now has three options, and “and none of them are good.”
First, he could simply walk away, which would produce a terrible outcome for the U.S., the Gulf, and global trade, according to Stavridis, who said this is unlikely.
The second option would be to “go big,” meaning a return to the hundreds of airstrikes a day seen at the start of the war—but this time possibly adding ground troops. But he also doubted this move, given how costly it would be and the reluctance to put boots on the ground.
The third and most likely option is the current “escalate to de-escalate” stance of bombing plus tighter economic pain, but still leaving the door open to negotiations, Stavridis added.
Meanwhile, he also warned that Iran or its proxies could eventually threaten the Suez Canal, which sees even more ship traffic than the Strait of Hormuz does, and Tehran’s attacks on Jordan may even be related to such plans.
“The Iranians are beginning to make noises about attempting to close that using the Houthis in the southwest corner of the Arabian Peninsula,” Stavridis said. “So that ought to be in the back of everyone’s mind.”