Russell 2000 Enters Correction as Iran War Rattles Markets
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- Russell 2000 closed in correction territory (down 10% from a recent high) on Friday — the first major U.S. stock index to do so in the current selloff, having last entered correction in January 2025 before briefly hitting bear market after Trump's "liberation day" tariffs.
- Nasdaq Composite briefly looked set to enter correction territory but pared losses to finish down 2% on Friday, its biggest daily percentage-point drop since Feb. 12; it now sits 9.7% below its record close from four months ago.
- Brent crude finished the week above $110 a barrel for the first time since 2022, as Trump told reporters he would oppose a ceasefire with Iran and the Pentagon moved thousands of additional Marines to the Middle East.
- S&P 500 closed at 6,506.48 on Friday — its lowest level since September — and broke below its 200-day moving average on Thursday, snapping a 214-trading-session streak above that technical floor.
- Goldman Sachs trading-desk data showed long-only hedge funds dumped $9.6 billion in stocks on a net basis Thursday, the largest single-day outflow on record going back to 2022.
- S&P 500 breadth collapsed, with only 18% of index components finishing Friday above their 50-day moving average — the lowest reading since April 21.
- Yardeni Research's Ed Yardeni said he expects the Iran war to produce a 10-15% market pullback and characterized such a drop as a buying opportunity.
Why it matters: With the Russell 2000 already in correction and the Nasdaq 9.7% off its record, the S&P 500 and Dow appear next in line — especially after the S&P broke below its 200-day moving average, snapping a 214-session streak. Hedge funds already flushed a record $9.6 billion in a single day Thursday, suggesting forced selling may intensify if the conflict continues.
