Iran has continued its retaliatory actions. According to reports from China Central Television (CCTV), Iran launched five rounds of ballistic missiles at Israel within a seven-hour period. Additionally, the Iranian military stated on March 7 that it had carried out a large-scale strike on US and Israeli military targets. On the same day, the Israel Defense Forces announced that over 80 Israeli Air Force fighter jets had completed a new round of strikes.
On March 7, Iranian President Pezeshkian delivered a speech calling for national unity to defend Iran and stating that unconditional surrender is absolutely impossible for the country. Also on March 7, Iran's Islamic Revolutionary Guard Corps reported striking an oil tanker that forcibly entered the Strait of Hormuz.
Separately, according to Xinhua News Agency, former US President Donald Trump posted on social media on March 6 stating that major American defense contractors have agreed to quadruple production of "precision-grade" weapons and reach maximum capacity at the fastest possible speed.
Notably, the S&P Composite Aerospace and Defense Index fell more than 4% this past Friday, declining over 22% from its peak last month. This indicates that US aerospace and defense stocks have slid into a bear market. The sharp drop in stock prices stems from the Iran conflict, which has caused jet fuel prices to surge by 15%.
This week, escalating Middle East tensions drove WTI crude oil prices up 36%, New York natural gas prices up over 11%, and European natural gas prices up more than 60%.
**Iran: Large-Scale Strikes on US and Israeli Military Targets** According to CCTV News, the Iranian military issued a statement on March 7 announcing that its naval forces conducted large-scale drone attacks, striking US assembly points and bases near Abu Dhabi airport in the UAE, a US military camp in Kuwait, and Israeli radar installations.
On the morning of March 7, explosions were heard at Dubai International Airport in the UAE, with some passengers in the terminal being urgently evacuated to a lower level for safety. The UAE Ministry of Defense confirmed that air defense systems were intercepting missiles and drones originating from Iran, and the sounds heard by the public were a result of these interceptions.
That same morning, Iran's Islamic Revolutionary Guard Corps stated that a commercial oil tanker named PRIMA ignored repeated warnings from the IRGC Navy and forcibly entered the Strait of Hormuz, after which it was struck by a drone.
Starting from 00:00 Israel time on March 7, Iran has launched five rounds of ballistic missiles towards Israel. The Israeli military reported that the missiles were intercepted, the fifth-round alert has been lifted, and there were no reports of casualties.
In the early hours of the same day, the IRGC announced the initiation of the 24th phase of "Operation True Promise 4," stating that three missiles launched towards Tel Aviv, Israel, all hit their intended targets.
On March 7, the Israel Defense Forces announced that over 80 Israeli Air Force fighter jets had completed a new round of strikes. This operation primarily targeted infrastructure in Tehran and other central regions of Iran, as well as multiple launch sites in western and central Iran.
Iranian President Pezeshkian, in his speech on March 7, called for national unity to defend Iran and reiterated that unconditional surrender is not an option. During his address, Pezeshkian expressed apologies to neighboring countries and stated that the interim leadership committee approved on March 6 that Iran would not attack neighboring countries or launch missiles unless those countries first initiate attacks against Iran.
**Trump: US Defense Giants Agree to Full-Scale Production Expansion** According to Xinhua News Agency, Trump posted on social media on March 6 stating that he had just held a meeting with major US defense contractors to discuss weapon production plans and schedules. The participating companies agreed to quadruple the production of "precision-grade" weapons and achieve maximum capacity as quickly as possible.
Trump indicated that the production expansion efforts actually began three months prior to the meeting, with factory construction and mass production processes for multiple weapon systems already underway concurrently. He also revealed that the US currently has a "nearly unlimited" supply of medium and upper-medium caliber ammunition, which is being used in military operations against Iran. Despite this, the US has still increased orders for this caliber of ammunition.
CEOs from seven companies, including Boeing, Honeywell Aerospace, Lockheed Martin, and Raytheon, attended the closed-door meeting.
On the same day, Trump declared on social media, "There will be no deal with Iran unless it surrenders unconditionally." He also stated that the US "and many of its allies" want to "Make Iran Great Again!"
Spanish Prime Minister Sánchez stated on March 6 that US and Israeli military actions against Iran are a "grave mistake." He simultaneously emphasized that Spain's deployment of a warship to Cyprus is solely to fulfill its defensive and assistance obligations to its EU partner.
In response to Trump's criticism that Spain, as an ally, refused to support his actions against Iran, Sánchez said during a press conference at the Spain-Portugal summit that Spain always acts in accordance with international law. "Among allies, when one makes a mistake, others should point it out. This war is a very serious mistake," he stated.
Regarding the deployment of the frigate "Cristóbal Colón" to Cyprus for defensive tasks, Sánchez explained that the ship was dispatched at Cyprus's request, primarily undertaking "protection, defense, and rescue" missions.
**US Aerospace and Defense Stocks Fall into Bear Market** As Wall Street warns that the Middle East war could severely squeeze profits by driving up fuel costs, US aerospace and defense stocks have slid into a bear market.
The S&P Composite Aerospace and Defense Index closed down 4.1% on Friday, marking its sixth consecutive day of declines. The index has fallen more than 22% from the multi-year high it reached last month. A decline of 20% or more from a peak is defined as a bear market.
Regarding individual stocks on Friday, American Airlines fell over 5%, United Airlines Holdings dropped 3.52%, Delta Air Lines declined 3.75%, and Alaska Air Group decreased 3.42%. For the week, American Airlines accumulated a loss of over 14%, United Airlines fell more than 13%, while Delta Air Lines and Alaska Air Group both dropped over 10%.
The sharp decline in airline stock prices stems from the Iran conflict, which has caused jet fuel prices to surge. Over the past week, jet fuel prices have increased by 15%, posing another challenge for an airline industry already grappling with the impacts of the expanding conflict, which has led to over 20,000 flight cancellations and stranded thousands of passengers.
Analysts worry that fuel prices could remain elevated for some time as the Middle East war continues. Deutsche Bank warned on Friday that price increases pose an "existential threat" to airlines. The bank noted that during the fuel price surge in 2005, the airline industry suffered severe damage, prompting Delta Air Lines and Northwest Airlines to file for bankruptcy.
Analyst Michael Linenberg wrote in a report, "Unless there is near-term relief, the Iran war could lead to the grounding of thousands of aircraft globally. Some of the financially weakest airlines may cease operations."
Although US airlines have been largely unaffected by the travel disruptions sweeping the Middle East, jet fuel can account for up to 30% of their costs, meaning they face significant indirect risks.
Companies operating large air cargo networks, FedEx Corporation and United Parcel Service, also extended their losses on Friday. Shares of fuel-intensive cruise line operators similarly trended lower.
Beyond rising fuel costs, travel and transportation companies could also suffer losses if the conflict makes consumers too anxious to travel abroad. Furthermore, rising oil prices could have broader effects on the overall US economy.
Deutsche Bank's Linenberg wrote, "Other important considerations include the negative impact of rising fuel prices on the US economy, particularly on the demand for air travel, especially among the most price-sensitive consumers."
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