Why Oil is Tumbling and Stocks are Rising After Iran Launched Missiles at US Bases

June 23, 2025

Oil prices tumbled 6% while stocks rallied after Iran's missile attack on U.S. bases in Qatar and Iraq was intercepted with no reported casualties. The market response indicates traders believe Iran lacks either the will or capability for effective retaliation against U.S. forces, contrasting with Iran's more substantial missile attack against Israel in June. Despite the weekend's U.S. strikes on Iranian nuclear facilities, markets have reacted contrary to conventional expectations, with stocks rising and oil falling rather than the reverse.

Who is affected

Oil traders and market investors
U.S. military forces in Qatar and Iraq
Global energy markets and consumers
Financial markets participants across stocks, bonds, currencies, and commodities
Potential broader economic stakeholders if conflict escalates

What action is being taken

Iran is firing missiles toward U.S. bases in Qatar and Iraq
Defense systems are intercepting Iranian missiles
Oil prices are dropping sharply (6% below $70 a barrel)
Stock markets are rallying (Dow up 270 points, S&P 500 up 0.7%, Nasdaq up 0.8%)
Traders are actively betting against significant Iranian retaliation capability

Why it matters

The conflict could potentially disrupt oil supplies through the Strait of Hormuz, which handles about a fifth of the world's oil flows
Combined with Trump's tariff policies, an escalation could reignite inflation
Market responses indicate traders' assessment of Iran's limited military capabilities
The Federal Reserve may face constraints in adjusting interest rates if inflation surges alongside a slowing economy
The dollar's behavior during this conflict may challenge its traditional role as a safe-haven currency during global unrest

What's next

No explicit next steps stated in the article

Read full article from source: The San Diego Voice & Viewpoint