Oil prices, Target earnings, the new iPhone and more in Morning Squawk

Good morning. While the war in Iran continues to unfold, today also brings the first midterm primary elections in the U.S. Here are the races to watch.

Stock futures are plunging this morning following a mixed session on Wall Street.

Here are five key things investors need to know to start the trading day:

The U.S. embassy in Saudi Arabia’s capital Riyadh was hit by two drones Tuesday morning local time, as the war in Iran continued to intensify. President Donald Trump said yesterday the conflict could last “far longer” than the four-week timeline he initially suggested.

Here’s what to know:

• U.S. Central Command on Monday said six American service members have been killed in action, an increase from four a day earlier.
• U.S. stocks staged a dramatic midday rebound yesterday. The S&P 500 finished Monday’s session slightly higher despite tumbling more than 1% earlier in the day.
• Travel stocks — including cruise ship operators, hotel chains and air carriers — slid as the conflict roiled global tourism.
• Oil prices are surging after Iran reportedly closed the Strait of Hormuz, a key chokepoint for the global oil trade. European natural gas futures have soared 70% this week after Iranian drone strikes halted Qatar’s liquefied natural gas production.
• Amazon shares pulled back in extended trading after the e-commerce giant said drone strikes damaged three of its facilities in the United Arab Emirates and Bahrain.
• Stock futures are signaling that Wall Street could be in for a rough day. Follow live markets updates here.

Target‘s fourth-quarter earnings blew past Wall Street’s expectations this morning, sending shares up 4% before the bell.

But the retailer reported falling revenue and store traffic in its important holiday quarter. Revenue came in lower than analysts expected and was down around 1.5% from the same period a year prior. Customer visits to stores and Target’s website have also now decreased for a fourth straight quarter.

Target is hosting an investor day at its Minneapolis headquarters this morning. CEO Michael Fiddelke will speak to CNBC’s Sara Eisen at 10 a.m. ET today, his first broadcast interview since taking the retailer’s helm last month. Watch live on CNBC or CNBC+.

Experts told CNBC’s Jessica Dickler that consumers should start expecting to pay more for gas within a week following the jump in oil prices.

A $10-per-barrel increase in the price of oil could equate to a hike of around a 25 cents a gallon at the pump, according to Ken Medlock, senior director at the Center for Energy Studies at Rice University’s Baker Institute. Gas prices set a record average high in June 2022, per AAA, after Russia’s invasion of Ukraine caused oil prices to hit $100 per barrel.

For Trump, the conflict in Iran could throw a wrench in his argument that inflation is under control. As Thierry Wizman, a strategist at Macquarie Group, put it: “War has proven to be ‘inflationary.'”

Apple kicked off its week of product releases yesterday with a new iPhone and updated iPad.

The company debuted the iPhone 17e, a lower-cost iteration of the iPhone 17, with prices starting at $599. Meanwhile, Apple replaced the M3 chip in its iPad Air with its M4 chip, while keeping the same design and price.

More product announcements are expected over the coming days. Apple has reportedly told stores to be ready for a big rush.

Paramount Skydance has plans to shake up the streaming landscape. If its deal to acquire Warner Bros. Discovery is approved by regulators, Paramount CEO David Ellison said Paramount+ and HBO Max would be merged into one service.

As CNBC’s Alex Sherman reports, Paramount didn’t offer details about potential pricing or what the platform’s name would be, but Ellison said he did not intend to change HBO’s brand. A source familiar with Paramount’s plans said HBO is expected to be a sub-brand within the larger service.

— CNBC’s Sean Conlon, Spencer Kimball, Pippa Stevens, Sarah Agostino, Leslie Josephs, Annie Palmer, Jessica Dickler, Jeff Cox, MacKenzie Sigalos, Alex Sherman and Hugh Son contributed to this report. Josephine Rozzelle edited this edition.