Futures Lower as Houthis Enter Iran War, 2,500 Marines Arrive in Gulf, Iran Hits Aluminum Smelters, Powell Speaks Today

The war just widened. Yemen’s Houthi fighters launched missiles at Israel on Saturday in their first direct participation in the Iran conflict, opening a second maritime front that threatens to choke the Bab el-Mandeb Strait — the narrow passage connecting the Arabian Peninsula and the Horn of Africa through which 12% of global seaborne oil and 8% of liquefied natural gas trade flows. The Strait of Hormuz was already effectively shut. Now traders are pricing the possibility that both of the Middle East’s critical waterways could be compromised simultaneously.

S&P 500 futures are down roughly 0.5% in early Monday trading as the market digests a weekend that delivered escalation on every front. The U.S. Central Command confirmed that 2,500 Marines aboard the USS Tripoli arrived in the region on Saturday, trained for amphibious landings. The Washington Post reported that the Pentagon is preparing for weeks of potential ground conflict in Iran. And in a Financial Times interview, President Trump said his preferred approach would be to “take the oil,” comparing it to U.S. actions in Venezuela and musing about seizing Kharg Island, Iran’s main oil export terminal.

Oil is the story. Brent crude settled at $112.57 on Friday — the highest close in more than three years — and WTI ended at $99.64. Premarket indications point to further gains as the Houthi escalation adds risk premium that was not in Friday’s close. The MSCI All Country World Index is down 9% month-to-date, Eurozone 10-year bonds are set for their worst month of the past decade, and global bond markets have lost $2.5 trillion in March.

Pre-Market Snapshot

Weekend Developments: The War Widens

The weekend brought a cascade of escalatory developments that will dominate Monday’s price action:

Houthis Enter the Conflict

Yemen’s Iranian-backed Houthi fighters launched missiles at Israel on Saturday, marking their first direct participation in the war. Analysts have told CNBC that the Houthis could attempt to close the Bab el-Mandeb Strait, adding a second maritime chokepoint to the conflict. Danish shipping giant Maersk responded to reports of drone activity and explosions at the Port of Salalah in Oman — a key transshipment hub. If the Bab el-Mandeb is compromised, ships would need to circumnavigate Africa, adding two to three weeks to transit times between Asia and Europe.

U.S. Ground Troops Arrive

The 31st Marine Expeditionary Unit — roughly 2,500 Marines and Sailors trained for amphibious operations — arrived in the Central Command area of responsibility aboard the USS Tripoli on Saturday. The Washington Post reported Saturday night that the Pentagon is preparing for weeks of potential ground conflict. In a Financial Times interview, Trump said he would prefer to “take the oil” and floated seizing Kharg Island, Iran’s primary crude export terminal in the Persian Gulf. The Wall Street Journal added that Trump is weighing a military operation to extract 1,000 pounds of uranium from Iran.

Iranian Parliament Speaker Mohammad Bagher Qalibaf responded that Iranian troops “are waiting for the arrival of American troops on the ground to set them on fire.” Republican Senator James Lankford said on NBC’s Meet the Press that he would support special forces operations but not a prolonged ground war without congressional authorization.

Iran Attacks Aluminum Smelters

Iran’s Revolutionary Guard Corps targeted two aluminum producers in U.S.-allied nations over the weekend. Emirates Global Aluminium reported “significant damage” to its Abu Dhabi plant from Iranian drone and missile strikes, with several employees injured. Aluminium Bahrain (Alba), which operates the world’s largest aluminum smelter, confirmed it was attacked on Saturday and is still assessing damage. Alba had already cut 19% of its annual 1.6 million-ton production capacity due to Strait of Hormuz supply disruptions. Under normal conditions, the Middle East produces about 9% of global aluminum supply. India’s Hindalco Industries has invoked force majeure on customer contracts.

Pakistan Prepares to Host Talks

Pakistan’s Deputy Prime Minister Ishaq Dar said Sunday that both the U.S. and Iran have expressed confidence in Pakistan to host talks “in the coming days.” The announcement followed a meeting of foreign ministers from Pakistan, Saudi Arabia, Turkey, and Egypt in Islamabad. Egypt’s foreign minister said the meetings aim to establish “direct dialogue” between Washington and Tehran. Iran had earlier allowed 20 Pakistani-flagged vessels to pass through the Strait of Hormuz — a small but symbolically significant concession. The market, however, has been burned before by ceasefire optimism: the last peace rally on March 23 reversed within 24 hours when Iran fired missiles at Israel.

Nuclear Sites Damaged

The IAEA confirmed satellite imagery showing severe damage to Iran’s Khondab heavy-water production plant near Arak. The agency said the installation has no declared nuclear material. Multiple nuclear sites have been struck since the war began a month ago. Separately, Iran threatened to target U.S. and Israeli educational institutions in the region unless Washington condemns strikes on Iranian universities, posting images of damage to the University of Science and Technology in Tehran.

Global Markets

European markets opened lower on Monday. The Stoxx Europe 600 fell roughly 0.8% with energy the sole green sector for the fourth time in five sessions. Eurozone 10-year bonds continued their worst monthly selloff in a decade. The euro area composite PMI fell to a 10-month low of 50.5 in March, barely above the expansion-contraction threshold of 50. Gasoline prices across the EU are up more than 10% and diesel above 20% this month.

Asian markets were mixed overnight. Japan’s Nikkei fell 0.9% to 37,100. Hong Kong’s Hang Seng dipped 0.5%. China’s CSI 300 was flat. India’s Nifty 50 dropped 1.2% as Hindalco’s force majeure announcement rippled through the industrials sector. Australia’s ASX 200 was down 0.6%. South Korea’s Kospi declined 1.3% as memory-chip weakness from Google’s TurboQuant AI breakthrough continued to weigh on the semiconductor complex.

Today’s Economic Data & Events

The Week Ahead at a Glance

Premarket Movers & Corporate News

Eli Lilly — $2.75 Billion AI Drug Discovery Deal

Eli Lilly announced a $2.75 billion deal with Hong Kong-based Insilico Medicine for exclusive rights to an AI-developed GLP-1 diabetes drug. Insilico receives $115 million upfront with the balance tied to regulatory and sales milestones. The deal underscores Big Pharma’s pivot toward AI-generated drug discovery, particularly in China where trials cost a fraction of U.S. levels. Lilly shares are up slightly premarket.

Anthropic Eyes October IPO

AI safety startup Anthropic, currently valued at $380 billion, is considering an IPO as soon as October. T-Rex has filed for leveraged SpaceX and Anthropic ETFs ahead of the anticipated public offerings. Google is separately planning to help finance a $5 billion data center project in Texas leased to Anthropic.

Other Premarket Headlines

• Nexstar-Tegna: A judge ordered a pause on the ~$6 billion TV station merger after DirecTV filed an antitrust suit.
• Nestle: KKR, CD&R, and PAI Partners advanced to the next round of bidding for a 50% stake in Nestle’s water business, which could fetch a $5.75 billion valuation.
• Novartis: Agreed to acquire allergy-focused biotech Excellergy in a $2 billion deal.
• CrossCountry Mortgage: Will acquire mortgage REIT Two Harbors in a revised cash bid to beat a $1.3 billion all-stock offer from United Wholesale Mortgage.
• Bank of America/Citigroup: Started selling chunks of the $57.5 billion bridge loan backing the $110 billion Paramount-Skydance-Warner Bros. Discovery deal.
• Microsoft: Froze hiring in cloud and North America sales groups, per The Information.
• Norwegian Cruise: Will replace five directors in a deal with activist Elliott Management.
• KPMG: Will cut ~600 UK jobs as the economic slowdown persists.
• Visma: Delayed its $22 billion London IPO to next year.
• Cuba: The U.S. allowed a Russian oil tanker carrying 650,000 barrels to enter Cuba despite the ongoing blockade. Trump said he had “no problem” with the delivery because “they have to survive.”

Death Toll & Humanitarian Context

One month into the conflict, the human cost continues to mount. Lebanon reports more than 1,200 killed. Iranian authorities say more than 1,900 have died. Israel reports 19 dead. In Iraq, 80 security forces members have been killed. Across Gulf states, 20 people. Thirteen American service members have died in the war. These are the numbers behind the ticker symbols.

Private Credit: The Shadow Crisis

The private credit stress that has been building for weeks is accelerating. Blue Owl and HPS joined the growing list of funds posting February losses. Oaktree met 8.5% withdrawal requests from its private credit fund — a surge in redemptions that signals institutional investors are actively de-risking. The SEC division overseeing these firms has lost 24% of its staff. JPMorgan and PIMCO say the bond market is underestimating slowdown risk, while Wall Street is reportedly “reeling” as the Iran war shatters traditional portfolio defenses. The 60/40 portfolio is broken when both stocks and bonds fall simultaneously.

Yet there is a contrarian signal: U.S. equity funds saw their strongest inflows in four months last week. Someone is buying the dip. The question is whether they are early or early to be wrong.