On June 13, after Israeli airstrikes on Iran, the US stock market reacted sharply: shares of tourism companies went into the red, while the energy and defense sectors soared amid rising tensions in the Middle East. This was reported by Bloomberg, writes UNN.
Details
According to market experts, all tourism stocks with global coverage are reacting negatively to the escalation of geopolitical tensions.
Consumer sentiment and cross-border demand may be negatively affected by recent events in the Middle East and related negative headlines
Investors generally abandoned risk due to a significant escalation of tensions in the region. The S&P 500 index fell 0.5% on Friday morning, while safe-haven assets such as gold and US Treasury bonds rose. The price of oil rose the most since 2020, reaching an intraday high.
Concerns that a long-term conflict could lead to rising fuel prices and negatively impact traveler confidence have negatively impacted shares of companies linked to the leisure industry
It is noted that American Airlines Group Inc. and United Airlines Holdings Inc. are reducing the S&P index related to airline stocks, with United Airlines announcing on Friday that it is suspending flights between Newark and Tel Aviv. Friday's fall hit the index hard, which is on track for its worst weekly drop in two months.
"Geopolitical tensions are also affecting the shares of hotels, travel booking sites and cruises. Carnival Corp. shares fell 4.4% on Friday, while Expedia Group Inc. fell 2%. The S&P index, which tracks these industries, has been falling for five consecutive sessions, on track for its longest decline since the beginning of January," the publication writes.
Let us remind you
Global oil prices have jumped sharply amid fears of a larger war after Israel's attack on Iran. Brent crude rose to $78 a barrel in the morning of June 13, the biggest jump since 2022.