Some of the top airline stocks are tanking — here's what you need to know

Two days after a surprise attack from fundamentalist group Hamas left more than 1,000 people dead and pushed the Israeli Cabinet to formally declare a state of war, many major airlines have called off all flights into Israel amid a retaliatory military response and escalating explosions at different border areas.

While Israeli-owned El Al  (ELALF) - Get Free Report continues to operate flights in and out of Israel, U.S.-based Delta Air Lines  (DAL) - Get Free Report, United  (UAL) - Get Free Report and American Airlines  (AAL) - Get Free Report as well as British Airways, Air France  (AFRAF) - Get Free Report and low-cost airlines such as EasyJet  (EJTTF) - Get Free Report have all canceled flights into Tel Aviv "until further notice."

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The widescale nature of the action has, in turn, caused many airlines shares to fall rapidly. By Monday afternoon, Delta shares were down more than 5% to $35 while United stock is down 5.56% to $39.50.

Delta, United and American stock is all down amid suspended service

American Airlines shares also dropped by a similar percentage to $12.11 while Air France stock is down more than 6% to $1.22. International Consolidated Airlines Group  (BABWF) - Get Free Report, which is the parent company behind British Airways, Aer Lingus, Iberia and Vueling, also saw its shares drop by nearly 6% to $3.57.

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On its website, Delta currently says that its service to Israel may be affected until Oct. 14. The drop in shares represents an immediate response to airlines' cancelations that, according to analysts, is likely to bounce back once service resumes given that flights to Israel are a small portion of these airlines' overall market share.

"If the war remains confined between Israel and Palestinians, it's likely that the markets will forget about it after a few days," Raffi Boyadjian, lead investment analyst at XM, wrote in a note to investors.

While rates of post-pandemic travel are currently at a high, airline stocks have generally been down this year as airlines struggle to find the staff to meet this demand.

Shares of these companies just soared, though

On the other end, shares of weapons producers such as Lockheed Martin  (LMT) - Get Free Report soared by more than 8% by Monday afternoon. Northrop Grumman  (NOC) - Get Free Report, a major producer of rockets and other defense weapons, saw its stock rise by more than 10% while missile producer RTX  (RTX) - Get Free Report's stock is up by 4.73%.

After floundering over the last few months, oil prices soared back up by nearly 5% to $86 a barrel amid worries that prolonged fighting could impact output from the Middle East. Citadel investment group also sent a note warning its investors that "any expansion of battles will have potential repercussions on oil markets."

"The events in this region are now directly impacting financial markets worldwide, which, as ever in times of increased volatility, is immediately prompting some investors into selling off riskier parts of their portfolios, such as stocks and some currencies," Nigel Green, who heads the London-based financial advisory company deVere Group, said in a statement to investors. "Oil has a disproportionate impact on global financial markets due to its pivotal role in the world economy, its interconnectedness with various sectors, and its potential to influence broader economic conditions and investor sentiment."