U.S. Stock Market: Prolonged Iran Conflict Intensifies Sell-Off, Nasdaq 100 Index Falls into Correction

Fears among traders that a surge in oil prices due to escalating conflict in Iran will hurt the global economy intensified the decline of the U.S. stock market on Friday.

The S&P 500 index closed down 1.7%, marking its fifth consecutive week of losses, the longest losing streak since 2022, as the index fell to its lowest point in over seven months.

The tech-heavy Nasdaq 100 index dropped 1.9%, falling more than 10% from its October peak, entering what is typically defined as a correction.

The Dow Jones Industrial Average also entered a correction after closing down 1.7%.

The VIX index, which measures market volatility, closed above 30 for the first time since April.

Brent crude rose to $114 per barrel after the U.S. and Israel bombed Iranian nuclear facilities on Friday, prompting Iran to retaliate in the Persian Gulf.

“I think the stock market is starting to show signs of fatigue, and hopes for a swift resolution to the war are fading,” said Gina Martin Adams, chief market strategist at HB Wealth Management.

Among the sectors in the S&P 500, the consumer discretionary sector posted the largest decline, while communication, technology, and financial sectors all fell more than 2%.

The S&P 500 industrial index fell 1.3%, down nearly 11% from its peak on March 2.

“The ideal scenario has not materialized,” said Brian Mulberry, chief market strategist at Zacks Investment Management. “The market is now beginning to consider the middle scenario and the worst-case scenario. For the stock market, the worst-case scenario is oil prices rising above $100 per barrel by July.”

U.S. Secretary of State Rubio stated that the war against Iran will last “weeks rather than months,” reiterating that there is no need to deploy ground troops.

However, the market remains concerned that the war will persist for a long time. Reports indicate that Trump is considering sending up to 10,000 additional ground troops to the Middle East.

The surge in oil prices has intensified inflation concerns and weakened the justification for the Federal Reserve to cut interest rates in the short term, pushing U.S. Treasury yields higher this week.

At the close, the S&P 500 index was down 1.7%, at 6368.85 points;

The Dow Jones Industrial Average fell 1.7%, at 45166.64 points;

The Nasdaq Composite index dropped 2.2%, at 20948.36 points;

The Nasdaq 100 index decreased by 1.9%, at 23132.77 points;

The Russell 2000 index fell 1.8%, at 2449.695 points.

Massive information and precise interpretation are all available on the Sina Finance APP.

Editor: Ding Wenwu