AAG(US:AAL) The Economic Times·2026-03-12 11:27Market Reaction - The Dow Jones futures dropped more than 300 points to 47,144, indicating a weak start for Wall Street due to rising geopolitical tensions and surging oil prices [21] - S&P 500 futures fell 35 points to 6,744, while Nasdaq futures decreased over 113 points to 24,870 as investors reacted to the market pullback [21] Oil Price Surge - Brent crude oil surged close to $100 per barrel, while West Texas Intermediate (WTI) crude jumped above $91, reflecting immediate market fears following attacks on oil tankers in Iraqi waters [6][10] - The spike in oil prices raised concerns about inflation and economic growth, as higher energy costs typically lead to increased transportation and manufacturing expenses [1][16] Impact on Key Sectors - Airlines and travel companies experienced significant losses, with stocks like Southwest Airlines and American Airlines dropping around 2% due to increased fuel costs [14][22] - Technology stocks also declined, contributing to the drop in Nasdaq futures, as growth stocks are often negatively impacted during periods of geopolitical uncertainty [14][22] Inflation Concerns - The rise in oil prices poses a risk of increasing inflation, complicating the Federal Reserve's potential interest rate decisions [16][17] - If crude oil prices remain above $90 or $100 per barrel, inflation could rise again, making it challenging for the Federal Reserve to cut interest rates in the near future [17][18] Investor Sentiment - Investors are shifting to a risk-off mode, moving money out of equities and high-risk assets in favor of safer investments amid rising geopolitical tensions [2][19] - The upcoming Personal Consumption Expenditures (PCE) Price Index will be closely monitored as it may influence future Federal Reserve policy [18][21]