Stocks fell sharply on Friday as the conflict between the U.S., Israel, and Iran escalated, and oil prices surged. The Dow Jones Industrial Average dropped by 443.96 points, or 0.96%, closing at 45,577.47. The S&P 500 decreased by 1.51%, settling at 6,506.48, while the Nasdaq Composite fell by 2.01% to end at 21,647.61. The Russell 2000 index also declined more than 2%, entering correction territory, which indicates a drop of 10% from its most recent peak. During the day, both the Dow and Nasdaq entered this correction range but closed just above it.
The decline followed a night of strikes exchanged between Iran and Israel, along with Iranian attacks on energy sites in the Persian Gulf. Reports indicated that the Pentagon is dispatching thousands of additional Marines to the Middle East, with speculation of “heavy preparations” to deploy ground troops to Iran.
Selling intensified in the afternoon after it was revealed that Iraq had declared force majeure on foreign-operated oilfields, leading to a rise in oil prices, with Brent crude reaching over $113 per barrel and WTI trading above $98.
Market analysts suggest that if troop deployments increase, the situation could lead to higher oil and gas prices in the coming weeks. Ross Mayfield, an investment strategist, noted that equity markets have not yet reacted fully to these events, suggesting there may be further declines ahead.
This week marks the fourth consecutive week of losses for major stock indices. The S&P 500 has fared slightly better than others, down 7% from its recent high. The day’s selling was widespread, particularly impacting technology stocks like Nvidia and Tesla, which each lost approximately 3%.
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