U.S. stock futures plummeted and oil prices swelled Tuesday evening after an Iranian attack on two military bases in Iraq housing American troops as tensions in the region continue to escalate.
Futures on the S&P 500 dropped about 1 percent and oil prices jumped in light of the news that Iran fired over a dozen ballistic missiles against against U.S. military and coalition forces at the al-Asad air base and in Irbil.
“Markets will likely remain nervous,” Mitul Kotecha, a strategist at TD Securities, told Bloomberg News. “Much now depends on the U.S. reaction and whether there is further escalation.”
The strikes against the bases in Iraq are the latest escalation between Washington and Tehran since the killing last week of Qassem Soleimani, Iran’s top general. The Pentagon said it is working on initial assessments of the damage at the two bases, which were on high alert.
“In recent days and in response to Iranian threats and actions, the Department of Defense has taken all appropriate measures to safeguard our personnel and partners. These bases have been on high alert due to indications that the Iranian regime planned to attack our forces and interests in the region,” said chief Pentagon spokesman Jonathan Hoffman.
“As we evaluate the situation and our response, we will take all necessary measures to protect and defend U.S. personnel, partners, and allies in the region,” he added.
The strike against Soleimani, who directed Iran’s international network of proxy forces, came as the general was planning imminent attacks on U.S. interests, according to the Pentagon. However, reporting has surfaced suggesting the evidence that Soleimani was in the final stages of planning a strike was thin.
Iranian Supreme Leader Ayatollah Ali Khamenei vowed “harsh retaliation” over the killing of Soleimani, who was known to be a close associate of the Iranian leader. U.S. forces have since ceased their operations against ISIS in the country to bolster their defenses against a possible Iranian attack, and the Iraqi parliament passed a vote calling for the government to expel U.S. forces from the country.