Dow, S&P 500, Nasdaq sell off as Iran war rages
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- US stock markets saw accelerated losses, with the Dow and S&P 500 falling around 0.9% and 1.5% respectively, while the Nasdaq slid 2%, nearing correction territory for the fourth straight week.
- Oil prices whipsawed but remained elevated, with Brent futures near $105 a barrel and West Texas Intermediate around $97, as Iran continued attacks and analysts warned of sustained high prices.
- Investors weighed an Axios report that the Trump administration is considering seizing or blockading Kharg Island, a vital Iranian energy terminal, to reopen the Strait of Hormuz, adding to market unease.
- President Trump stated he doesn't want a ceasefire with Iran, intensifying geopolitical tensions and contributing to crude oil spikes and stock declines.
- Inflation fears surged due to high oil prices, leading traders to pare back expectations for Federal Reserve rate cuts this year, further pressuring stock markets.
- The Energy sector (XLE) was a notable exception, on pace to close the week with over 3% gains, while most other sectors, including Materials and Utilities, finished in the red.
Why it matters: Escalating Mideast tensions and soaring oil prices are crushing stocks and killing hopes for Fed rate cuts.
