What Happened?
Shares of global airline American Airlines (NASDAQ:AAL) fell 5.4% in the morning session after Israel carried out significant strikes on Iranian nuclear and military sites, dramatically escalating fears of a broader conflict in the Middle East. This development has sent crude oil prices surging, as investors fear potential disruptions to global oil supply and a wider regional conflict. The conflict also fueled fears of higher operating costs for airlines and reduced global travel demand.
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What The Market Is Telling Us
American Airlines’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 17 days ago when the stock gained 5.1% on the news that the major indices rebounded (Nasdaq +2.0%, S&P 500 +1.5%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025. Companies with substantial business ties to Europe likely had some relief as the delay reduced near-term cost pressures and preserved cross-border demand.
American Airlines is down 37.6% since the beginning of the year, and at $10.61 per share, it is trading 43.2% below its 52-week high of $18.66 from January 2025. Investors who bought $1,000 worth of American Airlines’s shares 5 years ago would now be looking at an investment worth $635.21.
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