- US officials now believe an Iranian missile caused Flight 752 to crash on Wednesday, killing all 176 people on board.
- Boeing stock (NYSE:BA) rose Thursday on early morning speculation that Iran was behind the devastating plane crash.
- After news of official backing for the theory, including from Trump, reached markets, the Dow and S&P 500 retreated from earlier gains.
When Ukrainian International Airlines Flight 752 crashed Wednesday, it was attributed to a mechanical issue with the Boeing plane.
Given the timing of the US-Iran conflict, this would have been an amazing coincidence. But it was sadly plausible.
It would be the third 737 crash after Boeing’s two high profile disasters over the past two years.
It says a lot about investor confidence in Boeing that markets gave as much credence to a Boeing mechanical failure as Iranian retaliation at first.
US Officials Say Iran Shot Down Boeing Airliner
ABC News reported that Pentagon officials think it’s “highly likely” Iran shot down the plane. They say Iran targeted the Ukrainian airliner with radar and fired two surface-to-air missiles.
At a White House press event, Donald Trump backed the new explanation for the crash. He said he doesn’t “even think that’s a question” that a mechanical error was not the cause.
Iran’s refusal to give Boeing or the US Flight 752’s black box makes the government appear even more suspicious.
The president left room for continued de-escalation with Iran in his comments. He said a missile attack might have been a mistake:
It was flying in a pretty rough neighborhood. Someone could have made a mistake. I have a feeling that — it’s just some very terrible, something very terrible happened, very devastating.
But the stock market may have just priced in the risk of further escalation.
Stock Market React to Latest Iran Developments
Speculation that Iran brought down the airliner began to spread early Thursday morning. At 2:16 am EST, Bloomberg reported that a former FAA accident investigation chief said:
Airplanes don’t just catch fire and have that fire spread like that in such a short period of time, unless there was an intentional act causing that fire and explosion.
Boeing shares rose after Iran invoked international law to keep the black boxes, and Ukrainian officials pointed to the possibility of missile debris recovered at the crash site.
— TODAY (@TODAYshow) January 9, 2020
But immediately after President Trump confirmed US officials’ suspicions of foul play, stock market benchmarks dipped over new uncertainty about rising Iran tensions.