SOTS 2nd Hour: Israel-Iran Conflict: Impact for Stocks, Bonds, Energy, and the Fed 6/13/25

SPEAKER_1 (0:00)

Fidelity Trading Dashboard brings live data, news and charts into one screen, so you can build and place trades better. Start for free at fidelity.com/tradingdashboard. Investing involves risk, including risk of loss. Fidelity Broker Services LLC, member NYSC SIPC.

SPEAKER_2 (0:16)

Are you still quoting 30-year-old movies? Have you said, cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now. It pays to Discover. Learn more at discover.com/creditcard, based on the February 2024 Nelson Report.

Sara Eisen (0:47)

Good Friday morning and welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. Live as always for you, a post nine of the New York Stock Exchange.

Stocks are selling off, not an extreme reaction, after Israel launched airstrikes on Iran's nuclear facilities overnight. We are seeing a big move higher in oil. That's where the immediate impact is being felt. The S&P is down 0.8 of 1%. It's coming off of a strong run, though, for the week and for the past few weeks. We're only, I don't know, 2.5% off record highs for the S&P 500 Energy is the only sector, though, that is higher right now because of that move in oil prices. Everybody else is lower. Consumer staples are holding up the best. Not a surprise. The defensive names, staples, utilities, health care are all outperforming. Financials, for instance, consumer discretionary and tech. The travel names under pressure in particular. Take a look at treasuries. Not a huge rush towards safe haven assets. Gold's a little bit firmer. The dollar's a little bit firmer, but treasury prices are not. Yields are actually higher, 4.4. Maybe the concern there is on the inflationary impact of higher oil prices right now. We are going to discuss it all hour long. Israel striking Iran, the global markets impact. We've got a great line up of exports for you to break it all down. Mohammed Al-Aryan from Allianz, oil and energy expert Paul Sankey, former Trump National Security Advisor HR. McMaster, will all be our guest this hour.

Carl Quintanilla (2:08)

First, let's get straight to Megan Kasella with the latest on Israel and Iran and how Washington is responding. Morning again, Megan.

Megan Casella (2:14)

Hey, good morning again, Carl. So the president making a round of calls to reporters this morning telling various outlets, including the Wall Street Journal, that he and the administration knew about Israel's plans to attack Iran before they happened. He also called the attacks very successful, said that he had spoken with Israeli Prime Minister Benjamin Netanyahu yesterday, and Netanyahu's office now says they, the two men, do plan to speak again today. All of those comments coming after the president earlier this morning posted that he had given Iran chance after chance to make a deal, but that they just couldn't get it done. He says Iran now has perhaps a second chance warning them to make a deal. Now, he says, before there is nothing left. So standing very closely aligned with Israel here, even after the White House first emphasized overnight that Israel was acting unilaterally and that the US was not involved in these initial attacks. Iran clearly seeing no daylight between the US and Israel, saying that the attack would not have been possible without US coordination and that the US should be responsible then for the consequences of its actions. So as a result, the US now bracing for retaliation in the region while warning Iran against it. Secretary of State Marco Rubio saying that Iran should not target US interests or personnel. And on Capitol Hill hearing similarly, House Speaker Mike Johnson saying this morning that Israel was clearly within its right to defend itself and that, quote, Iran will face grave consequences if it responds by unjustifiably targeting US interests. The US now on high alert in the region, calling for voluntary departures for nonessential staff earlier this week and the AP just in the last few minutes now reporting that the US is shifting military resources around in the region in response to this idea of potential retaliation, guys, as soon as later today.

David Faber (3:59)

Megan, to the extent that there had always been an expectation if there was an attack on Iran, it might be led by the US and assisted by Israel or, at the very least, significant coordination ahead of time. Do we know why the Israelis chose now to undertake this attack?

Megan Casella (4:15)

They say that there are a few reasons. They think that this was an existential crisis for them and that it was becoming to the point where Iran clearly did not seem to be getting any closer to a deal with the US. There are some reports that some of its uranium enrichment that the US might have been agreeing to or likely to agree to in a deal was going further than Israel could really accept. There were also international bodies that just this week began to warn about Iran's nuclear capabilities and how close they were getting to the ability to develop a nuclear weapon. So a lot of things there that Israel said it had to happen now, but it does seem like it came for the US side. That's what we're still parsing here between the different reaction so far, but it seems like the US was still trying to pursue these negotiated talks before this type of approach was taken. That's sort of the fine line here. We're still waiting to hear more from the White House on that.