It is a bloodbath on Wall Street as the Iran conflict deepens.
Stocks are plunging, oil is surging, and fear is spreading across global markets. At 10.43 EST, the Dow Jones Industrial Average has fallen 1,238 points, wiping out Monday’s comeback and if sustained this will mark tje first 1,000-point drop since April 10, 2025.
Investors are rushing to reduce risk as tension between the United States and Iran threaten to spiral into a longer and more dangerous conflict. The S&P 500 dropped 2.2%, and the Nasdaq fell 2.3%, with technology stocks leading the selloff.
Oil shock sends markets into panic
The selloff began as oil prices spiked again. Brent crude jumped sharply, while US oil surged as well, after reports that Iran could close the Strait of Hormuz, the world’s most vital transit route for crude oil.
An Iranian Revolutionary Guard commander said the Strait of Hormuz is closed and that Iran would set ablaze ships attempting the route, Reuters reported.
The fear is that if oil supply is disrupted, prices could surge even higher. That would increase inflation and slow down economic growth around the world.
“Infrastructure is at risk throughout the region, and it’s not just at risk because of deliberate attacks, but also inadvertent attacks,” said Kevin Book, managing director at Clearview Energy Partners to AP. “Shrapnel and debris from missile interceptions can fall onto facilities and disable them too, and so there are a number of challenges that come from this kind of conflict in an area with so much energy production.”
Technology and chip stocks take the hardest hit
Technology and semiconductor stocks were among the biggest losers as traders pulled back from risk. At 10.43 AM EST, Nvidia fell nearly 2%, Intel dropped almost 7%. The semiconductor supply chain also suffered sharp losses.
When markets fear inflation and higher interest rates, growth stocks like tech companies are often the first to fall. The Nasdaq has definitely shown that pressure immediately as investors reduced exposure.
Inflation fears grow as oil rises
Wall Street is now facing what economists call a possible supply-side inflation shock. If oil stays high, the Federal Reserve may delay cutting interest rates. That is not a great news for stocks, especially high-growth companies.
Dollar strengthens as global investors retreat
As stocks fell, the US dollar strengthened. Investors often move money into the dollar during times of global uncertainty. European currencies weakened as energy concerns hit that region harder.
US President Donald Trump added to market anxiety by refusing to rule out deploying US ground troops.
Foreign investors are now unwinding profitable trades from the past year. Higher energy costs, lower risk appetite, and a stronger dollar are reshaping global capital flows in a single session.
Analysts say fully blocking the Strait of Hormuz would also damage Iran’s own economy, since all of its oil exports pass through that route.
“Iran has essentially two ways to close the strait. One is to harass or attack ships, and the other is to lay down mines,” Book said to AP. “And without a Navy, both of those things would be difficult. So, if the president succeeds in ‘annihilating,’ in his words, the Iranian Navy, then long-term prospects of closure should decline, and that should increase the likelihood that ships will start sailing again.”
Regardless of the dramatic drop, analysts say this is not a systemic financial crisis. Corporate earnings expectations have not collapsed. Instead, markets are rapidly repricing geopolitical risk and inflation expectations.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a registered financial advisor in the respective jurisdiction.