U.S. stocks opened sharply lower Friday following Israeli airstrikes on Iran, with investors fleeing to safe havens as geopolitical tensions reached dangerous new levels. The blue-chip Dow Jones Industrial Average tumbled 494 points (1.15%) at the open, while Brent crude oil surged 8% amid fears of Middle East supply disruptions.
Market Snapshot (9:33 a.m. ET)
- Dow Jones: 42,473.32 (-1.15%)
- S&P 500: 6,003.14 (-0.7%)
- Nasdaq: 19,507.96 (-0.79%)
- 10-Year Treasury Yield: 4.386% (+2 bps)
- Brent Crude: $92.18/barrel (+8.1%)
- Gold: $2,412/oz (+1.8%)
Conflict Escalation Sparks Volatility
Israel’s Defense Minister declared a state of emergency after launching retaliatory strikes, with officials warning of “14 days of planned operations.” Iran responded with drone attacks, raising fears of prolonged conflict.
Key Market Reactions:
- Energy stocks rallied (XLE +3.2%) while airlines (JETS -4.1%) plunged
- Defense contractors (LMT +5.3%, RTX +3.9%) surged on war fears
- Tech stocks pared earlier AI gains as risk appetite faded
Analysts Weigh In
“The main risk is escalation into regional war, but probabilities remain low for now,” said Tom Essaye of Sevens Report Research. JP Morgan’s Natasha Kaneva sees just 17% odds of catastrophic oil supply disruptions.
Oil Market Wildcard:
While Iranian production remains unaffected for now, Matthew Ryan of Ebury warned: “Any direct attack on oil infrastructure could send prices spiraling.”
Corporate Highlights
- Adobe (ADBE): Fell 6% despite strong earnings due to growth concerns
- RH (RH): Soared 24% after surprising profit in tough housing market
- Oracle (ORCL): Gave up pre-market gains despite bullish AI outlook
Political & Economic Fallout
- Former President Donald Trump urged nuclear negotiations via social media
- Potential auto tariff hikes (to >25%) added to trade war anxieties
- Fed rate cut expectations diminished as bonds sell off
What’s Next?
Traders will monitor:
- Further military developments
- Weekend G7 response
- Monday’s Asia market open