US stocks today: US stocks tumble to lowest close in 6 months as Iran war drags; Nasdaq confirms correction
Why it matters: The Iran war is crushing investor confidence, signaling deeper market corrections and shifting Fed policy.
- US stock indexes — the Dow, S&P 500, and Nasdaq — each suffered their fifth consecutive weekly decline, the longest streak in nearly four years, with the Nasdaq officially entering correction territory.
- President Trump issued a 10-day ultimatum to Iran to reopen the Strait of Hormuz or face destruction of energy plants, following Iran's rejection of peace proposals.
- Secretary of State Marco Rubio stated the US expects its operation in Iran to conclude in weeks without ground troops, despite recent deployments, contrasting with the market's sustained negative reaction.
- Oil prices surged, with U.S. crude up 5.46% and Brent up 4.22%, driven by the Iran war, contributing to inflation fears.
- Ken Polcari, chief market strategist at SlateStone Wealth, views the current downturn as a significant opportunity but anticipates a potential 15% to 20% drawdown before recovery.
- Megacap stocks like Nvidia and Amazon, along with software and consumer discretionary shares (e.g., Carnival, Norwegian Cruise Line), were major drags on the S&P 500.
- Money market participants no longer expect any Federal Reserve rate cuts this year, a stark reversal from prior expectations of two cuts, and are now pricing in a 25% chance of a rate hike by October, according to CME's FedWatch Tool.
US stocks have plunged to a six-month low, with the Nasdaq confirming a correction, as the ongoing Iran war fuels inflation fears and dampens hopes for interest rate cuts. Despite President Trump's ultimatum to Iran and Secretary Rubio's optimistic timeline for the conflict, markets remain deeply pessimistic, bracing for further declines.
