Oil prices continued to rise Monday morning, though they’ve backed off their highs in the aftermath of the bombing missions Israel carried out against Iran Friday. Over the weekend, Iran retaliated with a barrage of hundreds of missiles that seemed to overwhelm at times Israel’s Iron Dome defense system.

The missile exchanges dominate global market focus as it intensified fears of energy supply disruptions. West Texas Intermediate (WTI) crude futures climbed as high as $74.78 per barrel Sunday evening, but eased back to below $72.54 per barrel this morning, though that remains 11% above where it traded last Monday.

Brent crude, the global benchmark, is also trading 10% higher at $73.72 per barrel than it did one week ago. Both hit five-month highs. The spike follows Iran’s threats to block the Strait of Hormuz, a vital chokepoint for 20% of global oil flows, amid escalating retaliatory strikes targeting energy infrastructure.

U.S. stock futures were edging higher despite the geopolitical turbulence. Dow Jones Industrial Average futures gained 0.2%, S&P 500 futures rose 0.3%, and Nasdaq 100 futures ticked up 0.4%. The cautious rebound follows Friday’s sharp sell-off, with the Dow shedding 1.4%, the S&P 500 down 0.5%, and the Nasdaq Composite off 0.7% for the week. Gold also rallied, reflecting safe-haven demand amid rising volatility.

The oil-driven uncertainty complicates the Federal Reserve’s upcoming interest rate decision, due Wednesday. Markets expect rates to remain steady, but soaring crude prices could reignite inflation pressures, challenging the Fed’s delicate balancing act. Investors are waiting for Monday’s Empire State Manufacturing Survey for clues on economic momentum.

With global energy markets on edge and Iran’s response looming, volatility is likely to persist, keeping oil prices and their economic ripple effects in sharp focus.

What did they know and when did they know it? That Watergate-era question of complicity arises once again looking at the stock trades of Senators and House Representatives involving defense contractors. An examination of recent stock trades show a number of congressmen were loading up on Lockheed-Martin (LMT), RTX (RTX), and L3Harris Technologies (LHX) before the outbreak of Middle East hostilities.

According to the Unusual Whales site, which tracks the stock trades of politicians, in the most recent reports just filed, Reps. Rob Bresnahan (R-PA) and Jared Moskowitz (D-FL) were buying LMT stock, Sen. John Boozman (R-AR) and Reps. Josh Gottheimer (D-NJ) and Bruce Westerman (R-AR) were buying RTX. Rep. Gilbert Cisneros (D-CA) bought Northrop Grumman (NOC).

Lockheed-Martin and RTX and the two largest defense contractors, and both supply Israel with much of its defensive capabilities. For example, LMT produces F-35 fighter jets for Israel’s military, Hellfire missiles, and C-130J Super Hercules troop transport planes. RTX designs and manufactures a range of weapons systems as well components for Israel’s Iron Dome and David’s Sling missile systems.

Republican Senator MarkWayne Mullin on May 12 bought between $15,000 and $50,000 of LHX, which is a military drone maker. On June 6, President Trump issued an executive order titled “Unleashing American Drone Dominance” that calls for boosting U.S. drone production. Mullin serves on the Armed Services Committee. LHX shares are up 6% in the 10 days since the EO was issued and the Middle East turned hot again.

While it is certainly possible these politicians could just have uncanny good timing to buy defense stocks just before the outbreak of major hostilities or executive orders being issued that benefit certain contractors, Unusual Whales has detailed how Congress knack for making those special trades allows it to consistently outperform the S&P 500 by a wide margin.

— Rich Duprey

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Source: Money Morning