By YURI KAGEYAMA AND MICHELLE CHAPMAN, AP Business Writers

NEW YORK (AP) — Global markets slumped and oil prices soared to levels not seen in more than a year as Iran launched a series of retaliatory attacks, including a drone strike on the U.S. Embassy in Saudi Arabia.

U.S. futures are down sharply Tuesday with the S&P 500 and the Dow Jones Industrial Average falling 1.7%.

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Benchmark U.S. crude jumped 8.6% to $77.36 a barrel. Gas prices were already rising before the U.S. struck Iran as refiners switch over to summer blends of fuel.

The average price for a gallon of gasoline in the U.S. jumped 11 cents overnight to about $3.11, according to data from motor club AAA.

Brent crude, the international standard, added 6.7% to $81.29 a barrel. Global oil prices jumped to start the week over concerns that the war will clog the global flow of crude.

Stocks of airlines, including American Airlines, United and Delta have continued to slide, falling between 2% to 3% before Tuesday’s market open. Higher oil prices threatens to send ticket prices higher and fighting in the Middle East already has closed airports and left travelers stranded.

Shares of Amazon declined 2% in premarket trading Tuesday as the online giant said Monday that two of its data centers in United Arab Emirates were hit by drones, while a drone strike near one of its facilities in Bahrain “caused physical impacts to our infrastructure.”

In early European trading, France’s CAC 40 dropped 2.9% to 8,151.12, while in Germany the DAX sank 3.7% to 23,738.90. Britain’s FTSE 100 declined 2.6% to 10,496.32.

In South Korea, a big energy importer, the Kospi plunged 7.2% as markets reopened after a holiday on Monday, closing at 5,791.91.

Japan’s benchmark Nikkei 225 sank 3.1% to finish at 56,279.05. Like other resource-poor countries in the region, Japan could be especially hit by the lack of access to the Strait of Hormuz, since much of its oil and natural gas imports are shipped through there.

Analysts say Japan has a sizable stockpile lasting more than 200 days, and so the threat isn’t immediate.

Japanese energy stocks plunged, with Eneos Corp. down 3.4% and Idemitsu Kosan down 3.1%. Defense-related issues, which have risen recently on expectations of more military spending by Prime Minister Sanae Takaichi, sank back as traders sold to lock in gains from the day before. Mitsubishi Heavy plunged 5.3%, and IHI lost 4.9%.

In the rest of the region, Australia’s S&P/ASX 200 lost 1.3% to 9,077.30, while Hong Kong’s Hang Seng shed 1.1% to 25,768.08. The Shanghai Composite index lost 1.4% to 4,122.68.

The losses cascaded in Asia, with ANA stock down 3.3%, while Japan Airlines fell 6.4%. Korean Air declined 10.3% and Qantas Airways lost 1.8%.

Despite global markets in retreat, the reactions to the war have been moderated by the fact that past military conflicts in the Middle East haven’t caused long-term declines. For this war to knock down U.S. stocks in a significant and sustained way, the price of oil would perhaps need to jump above $100 per barrel, according to strategists at Morgan Stanley led by Michael Wilson.

“Since 2000, there have been 22 one-day oil price spikes of more than 10%,” said Stephen Innes, managing partner at SPI Asset Management. “In other words, energy shocks do not automatically derail equities unless they are severe and sustained. The market is well aware of that playbook.”

On Monday, the S&P 500 fell as much as 1.2% but finished with a gain of less than 0.1%. The Dow Jones Industrial Average dipped 0.1% and the Nasdaq composite rose 0.4%. Both also recovered from steep early losses.

In currency trading early Tuesday, the U.S. dollar edged up to 157.58 Japanese yen from 157.47 yen. The euro cost $1.1608, down from $1.1692.

Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama

By ANNE D’INNOCENZIO, AP Retail Writer

MINNEAPOLIS (AP) — Target reported another quarter of declining sales and profits as the retailer struggles to regain its footing with its customers contending with higher prices almost everywhere.

But the Minneapolis company on Tuesday offered a solid annual profit outlook that was better than Wall Street had been projecting, It also said it believes net sales will grow every quarter this year.

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Target also said comparable-store sales rose to start the current quarter.

Shares jumped more than 4% before the opening bell.

The company earned $2.30 per share, or $1.05 billion, for the three-month period ended Jan. 31. That compares with $2.41 per share, or $1.10 billion, during the year-ago period. Adjusted earnings per share for the most recent quarter was $2.44.

Sales fell 1.5% to $30.45 billion during the latest period. For the full year, sales fell nearly 2% to $104.78 billion.

Analysts were expecting $2.16 per share on sales of $30.46 billion, according to a survey by FactSet.

Comparable sales — sales at established stores and online channels — fell 2.5%, followed by a 2.7% dip in the fiscal third quarter. The latest figure marks 11 quarters out of the past 13 that Target has posted either declines or flattish growth for this measure.

Target’s performance underscores the challenges faced by new CEO Michael Fiddelke, a 20-year company veteran, who succeeded longtime CEO Brian Cornell last month.

Fiddelke is expected to reveal details about his plans to turn around Target on Tuesday during the company’s annual meeting in Minneapolis. Investors are hungry for a return to Target’s former dominance in affordable chic for which it earned it the nickname “Tarzhay” in years past.

Fiddelke takes over with Target’s hometown of Minneapolis a front line of sorts in President Donald Trump’s campaign to curb illegal immigration. Some of the company’s stores have become a flashpoint in a pushback against U.S. Immigration and Customs Enforcement. The company has faced pressure to take a public stand against the immigration crackdown.

Even before the immigration clashes, Target had been facing protests and boycotts over the company’s decision to roll back its diversity, equity and inclusion initiatives. Critics believe it’s a betrayal of Target’s retail giant’s philanthropic commitment to fighting racial disparities and promoting progressive values in liberal Minneapolis and beyond.

That is outside of a volatile economic and political environment that has been intensified by an aggressive trade campaign under Trump. The White House is now seeking a global tariff of 15%, after the U.S. Supreme Court struck down many of the far-reaching taxes on imports that he had imposed over the last year.

While the pace of inflation has cooled, consumer prices have soared about 25% over the past five years. U.S. companies are facing a hazy outlook with American households hurting, and the Trump administration is trying to work around the Supreme Court ruling to keep his duties in place.

And Target customers have soured on what they see as untended and messy stores with lackluster merchandise.

As the company’s nearly 2,000 store locations have become shipping hubs for online operations, customers say the shopping experience within stores has suffered with staff fulfilling digital orders rather than tending to store aisles.

Target is also facing stiffer competition from Walmart, which has stepped up its focus on fashion and other goods. As many Americans trade down because of inflation, Walmart has gained market share, particularly among households with annual income above $100,000.

Joe Feldman, a senior managing director and the assistant director of research at Telsey Advisory Group, believes that shopper boycotts over its pullback from DEI and its lack of a forceful stand against ICE cut into sales. But he said overall, Fiddelke seems to be willing to make changes to improve its operations.

Fiddelke has already reshuffled the leadership team at Target, boosted spending on in-store store staffing and made cuts at distribution facilities and regional offices, according to a memo sent to employees in February.

The company is also reworking its store label brands such as its home goods brand called Threshold and announced a merchandise collaboration with Roller Rabbit, a brand known for its 1960s-inspired silhouettes and colorful playful prints. The collection of clothing, pajamas and accessories is expected to make its debut at Target this month for a limited time.

Tuesday’s report offered some hopeful signs for the business. Target said that sales and customer traffic accelerated in the final two months of the quarter. And it saw sales growth in food and beverage, beauty and toys for the latest quarter.

Target said that it expects net sales for the year to increase by 2%, which would mean it expects sales to reach $106.88 billion. That’s a bit above analysts’ expectations of $106.7 billion. Target also anticipates earnings per share to be in the range of $7.50 to $8.50. Analysts are expecting $7.30 per share for the year, according to analysts polled by FactSet.

Today is Tuesday, March 3, the 62nd day of 2026. There are 303 days left in the year.

Today in history:

On March 3, 2005, millionaire adventurer Steve Fossett became the first person to fly a plane around the world solo without stopping or refueling, landing in Salina, Kansas, where he took off 67 hours earlier.

Also on this date:

In 1845, Florida became a U.S. state.

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Major historical documents start journey across US as part of nation’s 250th anniversary celebration

In 1849, Congress established the U.S. Department of the Interior.

In 1863, President Abraham Lincoln signed the act creating the National Academy of Sciences.

In 1931, President Herbert Hoover signed a bill making “The Star-Spangled Banner” the national anthem of the United States.

In 1943, in London’s East End, 173 people died in a crush of bodies at the Bethnal Green Tube station, which was being used as a wartime air raid shelter.

In 1945, Allied troops fully secured the Philippine capital of Manila from Japanese forces during World War II after a monthlong battle that destroyed much of the city.

In 1969, Apollo 9 blasted off from Cape Kennedy on a mission to test NASA’s lunar module.

In 1991, motorist Rodney King was severely beaten by Los Angeles police officers after a high-speed chase in a scene captured on amateur video that sparked public outrage. (The subsequent acquittal of four officers of felony assault and other charges in April 1992 triggered days of rioting and dozens of deaths in Los Angeles.)

In 2022, OxyContin maker Purdue Pharma reached a nationwide settlement over its role in the opioid crisis, with the Sackler family members who own the company boosting their cash contribution to as much as $6 billion in a deal intended to stanch a flood of lawsuits.

Today’s birthdays:

Filmmaker George Miller is 81.
Singer Jennifer Warnes is 79.
Author Ron Chernow is 77.
Football Hall of Famer Randy Gradishar is 74.
Musician Robyn Hitchcock is 73.
Actor Miranda Richardson is 68.
Radio personality Ira Glass is 67.
Olympic track and field gold medalist Jackie Joyner-Kersee is 64.
Rapper-actor Tone Loc is 60.
Hockey Hall of Famer Brian Leetch is 58.
Actor Julie Bowen is 56.
Actor David Faustino is 52.
Actor Jessica Biel is 44.
Singer Camila Cabello is 29.
NBA forward Jayson Tatum is 28.

By JON GAMBRELL, DAVID RISING and SAMY MAGDY

DUBAI, United Arab Emirates  — Iran hit the U.S. Embassy in Saudi Arabia’s capital with a drone strike early Tuesday as it kept striking targets around the region, while the United States and Israel pounded Iran with airstrikes in what U.S. President Donald Trump suggested was just the start of a relentless campaign that could last more than a month.

The attack from two drones on the U.S. Embassy in Riyadh caused a “limited fire” and minor damage, according to Saudi Arabia’s Defense Ministry, which did not release further details. It follows an attack the day before on the U.S. Embassy in Kuwait.

The expansion of Iranian retaliation across the Gulf and the intensity of the Israeli and American attacks, the killing of Iranian Supreme Leader Ayatollah Ali Khamenei and the lack of any apparent exit plan portend a possible prolonged conflict with far-reaching consequences.

Many countries deemed safe havens in the Mideast have been hit by Iran in retaliation for the U.S. and Israeli strikes, with recent targets including two Amazon data centers in the United Arab Emirates and a drone impact near another in Bahrain that caused damage, the company said Tuesday. Iran has also hit energy facilities in Qatar and Saudi Arabia, and attacked several ships Strait of Hormuz, the narrow mouth of the Persian Gulf through which a fifth of all oil traded passes, sending global oil and natural gas prices soaring.

The U.S. State Department urged U.S. citizens to leave more than a dozen Middle Eastern countries due to safety risks, as have many other countries, though with much of the airspace closed many remain stranded.

Trump said operations are likely to last four to five weeks but that he was prepared “to go far longer than that.”

“The hardest hits are yet to come from the U.S. military,” Secretary of State Marco Rubio told reporters before briefing members of Congress about the Iran operation.

Hundreds dead in Iran and dozens in Lebanon along with 11 in Israel

The Iranian Red Crescent Society said the U.S.-Israeli operation has killed at least 555 people. In Israel, where several locations were hit by Iranian missiles, 11 people were killed. Israel’s retaliatory strikes against Hezbollah killed dozens of people in Lebanon.

“Military escalation would force more families from their homes and hit civilians hard,” said Amy Pope, director general of the International Organization on Migration as she called Tuesday for the international community to press for de-escalation.

“Millions are already displaced in the region,” she said.

The U.S. military has confirmed six deaths of American service members. All six were Army soldiers and part of the same logistics unit in Kuwait, according to a U.S. official who was not authorized to comment publicly and spoke on condition of anonymity.

Three people were reported killed in the United Arab Emirates, and one each in Kuwait and Bahrain.

Iran’s top diplomat on Monday shared a photo showing graves he said were for more than 160 girls killed during a U.S.-Israeli strike on a school in Minab. “Their bodies were torn to shreds,” Abbas Araghchi, the country’s foreign minister, said on X.

In Israel, three young siblings killed by an Iranian strike were being laid to rest at the Mount of Olives in Jerusalem on Monday night.

The chaos of the conflict became apparent when the U.S. military said Kuwait had “mistakenly shot down” three American fighter jets while Iran was attacking it with aircraft, ballistic missiles and drones. U.S. Central Command said all six pilots ejected safely.

Israel and U.S. target nuclear facilities and missile infrastructure

Iranian state TV said strikes caused two explosions early Tuesday at a broadcasting facility in Tehran, but said no one was injured.

Reza Najafi, Iran’s ambassador to the International Atomic Energy Agency, told reporters that airstrikes targeted the Natanz nuclear enrichment site on Sunday.

“Their justification that Iran wants to develop nuclear weapons is simply a big lie,” he said.

Israel and the U.S. have not acknowledged strikes at the site, which the U.S. bombed in the 12-day war between Iran and Israel in June. Israel has said it is targeting the “leadership and nuclear infrastructure.”

Trump said the military campaign’s objectives are to destroy Iran’s missile capabilities, wipe out its navy, prevent it from obtaining a nuclear weapon and ensure that it cannot continue to support allied groups like Lebanon’s Hezbollah, which fired missiles at Israel on Monday.

Iran has said it has not enriched uranium since June, though it has maintained its right to do so and says its nuclear program is peaceful.

Israeli Prime Minister Benjamin Netanyahu maintained, however, that Iran was rebuilding “new sites, new places” underground for making atomic bombs in an interview broadcast late Monday on Fox News Channel’s Hannity.

“We had to take the action now and we did,” said Netanyahu, who offered no evidence to support his claim.

Satellite photos analyzed by The Associated Press showed limited activity at two nuclear sites in Iran before the war. Analysts said Tehran was likely assessing damage from the 2025 U.S. strikes and possibly salvaging what remained.

Attacks on Iran have drawn in proxy forces from around region

The conflict has also spread to Lebanon, where the Iranian-supported militant group Hezbollah fired missiles at Israel on Monday, though there were no reports of injuries or damage.

Israel retaliated with strikes on Lebanon. The country’s Health Ministry reported at least 52 people were killed and 154 wounded in overnight strikes in the Beirut suburbs and southern Lebanon.

An Israeli military spokesman, Brig. Gen. Effie Defrin, said Israel is keeping “all options on the table,” including a potential ground invasion of Lebanon.

Israel hit Beirut with more airstrikes early Tuesday morning, saying it was targeting “Hezbollah command centers and weapons storage facilities.”

Hezbollah also said it launched drones targeting an Israeli air base. The Israeli military said it downed two drones.

An Iranian-linked militant in Iraq has also claimed strikes on U.S. military facilities.

___

Melanie Lidman in Tel Aviv, Israel, Hallie Golden in Seattle, Washington and Giovanna Dell’Orto in Miami contributed to this report. Rising reported from Bangkok and Magdy from Cairo.

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