Israel launched airstrikes on Iran on Friday, causing stocks to tumble and oil prices to surge. The Dow Jones Industrial Average fell 769.83 points, or 1.79%, ending at 42,197.79. The S&P 500 dropped 1.13% to close at 5,976.97, while the Nasdaq Composite lost 1.30% and settled at 19,406.83.
This sell-off dragged the major averages into negative territory for the week. West Texas Intermediate (WTI) crude oil futures surged more than 7%, at one point nearing $74 a barrel. Gold prices also rose as investors flocked to safe assets.
“This conflict adds challenges to the already sizable collection of worries being maintained by the markets. The spike in crude, if it persists, will have an almost immediate impact on inflation numbers,” said Mark Malek, chief investment officer of Siebert Financial. President Donald Trump urged Iran to return to the negotiating table in a post on his social media site Truth Social.
“There has already been great death and destruction, but there is still time to make this slaughter come to an end. Iran must make a deal, before there is nothing left,” Trump wrote. Israel’s defense minister Israel Katz declared a special state of emergency following the attacks.
Iranian state television reported that the sixth round of nuclear negotiations with the U.S. planned for the weekend could be impacted.
Israel airstrikes impact global markets
Travel stocks took a hit as Israel’s attack on Iran raised concerns about the outlook for international travel.
Cruise and airline stocks were particularly affected due to fears that rising oil prices would weigh on profits. Investments tied to gold climbed on Friday, as the conflict drove demand for safe assets. Gold futures hit their highest level since April, rising 1.3%.
The Israel Defense Forces reported that Iran launched retaliatory strikes on Friday, with videos showing missiles headed towards Tel Aviv. It was not immediately clear if any of the missiles hit their targets or if they were intercepted by Israel’s air defense system. Bitcoin fell as low as $103,000 on Friday morning after beginning the week near its record high of almost $112,000.
It was last trading around $104,000. “The airstrikes sent oil spiking, which jolted inflation expectations and yanked rates higher, creating a chain reaction across risk assets,” said Ben Kurland, CEO at crypto research and charting platform DYOR. The University of Michigan Survey of Consumers showed that consumer sentiment rose markedly in June, driven by easing concerns over inflation and some progress on the tariff front.
The headline index of consumer sentiment increased to 60.5 in June, well ahead of the Dow Jones estimate of 54. Overall, the markets responded sharply to the geopolitical tensions, influencing various sectors and commodities significantly. Investors anticipate continued volatility as the situation unfolds.
