U.S. Markets Plunge as Iran War Fears Trigger Fifth Consecutive S&P 500 Decline
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NEW YORK — U.S. stock markets tumbled Thursday, with the S&P 500 posting its fifth consecutive weekly loss and both the Dow Jones Industrial Average and Nasdaq Composite entering correction territory amid escalating fears over the Iran conflict.
The S&P 500 fell 2.1% to close at 5,412.33, marking its longest losing streak since the 2022 bear market. The Dow Jones dropped 1,245 points, or 3.2%, to 37,891.45, while the Nasdaq Composite slid 3.8% to 16,782.11. A correction is defined as a decline of 10% or more from a recent high, and both major indices have now breached that threshold.
Investors reacted sharply to reports of heightened military activity in the Middle East. Tensions between Iran and regional adversaries have intensified over the past week, prompting concerns about potential disruptions to global energy supplies and broader geopolitical instability. Oil prices surged 4.5% to $92.30 per barrel, adding to inflationary pressures and dampening investor sentiment.
Wall Street analysts noted that the market’s reaction reflected growing unease about the war’s potential to escalate into a wider regional conflict. “The uncertainty is paralyzing capital allocation,” said one senior portfolio manager at a New York-based investment firm. “Until there is clarity on the scope of hostilities, risk assets will remain under pressure.”
Technology stocks bore the brunt of the selloff, with major semiconductor and software companies leading declines. The Nasdaq’s slide was driven by losses in mega-cap names, including declines in shares of major tech firms that have seen significant gains over the past year. Industrial and energy sectors also fell, though some defense contractors saw modest gains as investors sought exposure to potential wartime demand.
Federal Reserve officials have maintained a cautious stance on interest rates, with markets pricing in a delayed rate cut amid inflation concerns. The yield on the 10-year Treasury note rose to 4.32%, reflecting investor flight to safety. The dollar strengthened against major currencies, while gold prices climbed to a new record high.
The market’s performance comes as economic data remains mixed. While employment figures have held steady, consumer confidence has weakened, and manufacturing activity has contracted for the third consecutive month. Analysts are now debating whether the selloff signals a broader economic slowdown or a temporary reaction to geopolitical risk.
Traders will be watching closely for further developments in the Middle East. Diplomatic efforts to de-escalate tensions are ongoing, but no breakthrough has been announced. The extent of the conflict’s impact on global supply chains and energy markets remains uncertain, leaving investors on edge as the week closes.