US stock markets tumbled on Friday as renewed military conflict between Israel and Iran rattled investors and fueled a global flight to safety. Rising geopolitical tensions drove oil prices to their highest level since January and pushed investors away from riskier assets, triggering a broad sell-off across major indexes.
Major Indexes Post Sharp Losses
The Dow Jones Industrial Average dropped nearly 1.8%, or almost 800 points. The S&P 500 fell 1.1%, while the tech-heavy Nasdaq Composite declined 1.3%. Stocks hit session lows in the afternoon after reports that dozens of Iranian missiles were launched at Israel, with the Israeli Defense Forces declaring that “all of Israel is under fire.” Iran labeled Israel’s earlier attack a “declaration of war.”
Oil and Gold Prices Surge
The military strikes sent crude oil prices soaring. West Texas Intermediate crude futures surged more than 7%, after reaching intraday gains of as much as 13%. The spike followed Israel’s preemptive strikes on Iranian nuclear and military facilities, targeting the third-largest OPEC oil producer. Gold futures also jumped around 1.5% as investors sought safe-haven assets in response to growing instability.
Escalation Risks Drive Market Uncertainty
Israeli Prime Minister Benjamin Netanyahu vowed that the military operation would continue “for as many days as it takes,” raising fears of prolonged conflict. He warned of multiple waves of Iranian retaliation. Iran, in turn, threatened to target US assets in the region as part of its response. Secretary of State Marco Rubio emphasized that Israel acted unilaterally, warning Iran against attacking US personnel or interests.
Trump Pushes Domestic Agenda Amid Global Tensions
The stock market volatility came as President Donald Trump floated several domestic policy moves that could further unsettle markets. He signaled potential increases in auto tariffs and suggested unilateral tariff hikes on foreign countries within two weeks. Trump also renewed his calls for the Federal Reserve to deliver a jumbo rate cut, hinting that he “may have to force something” as inflation continues to ease. Analysts widely expect the Fed to hold interest rates steady at next week’s policy meeting.
Investor Sentiment Wavers
Friday’s sharp declines reflect growing investor unease as geopolitical risks compound with domestic policy uncertainty. While markets had been climbing in recent sessions, the escalation between Israel and Iran added a new layer of volatility that is likely to weigh on risk sentiment in the near term.
Conclusion
As military tensions in the Middle East intensify and domestic policy uncertainties mount, US stock markets are facing heightened volatility. Investors continue to monitor developments closely, with both geopolitical and monetary policy decisions poised to play a critical role in market direction in the weeks ahead.
