Dow down 1.87%, Stock Market Bearish after Trump Pledges to Attack Iran
The Dow fell sharply Wednesday as well as other leading US stock market indices after Trump announced plans to attack Iran.
Quick overview
- President Trump announced a likely attack on Iran, causing the stock market to drop significantly, with the Dow losing 953 points.
- All major U.S. stock indices fell over 1.5%, marking one of the largest single-day declines in months.
- Oil prices surged following the announcement, with Brent crude and West Texas intermediate rising by 1.8% and 2.07%, respectively.
- While AI and chip stocks have shown resilience, the ongoing Iran conflict and rising inflation could threaten their performance.
President Donald Trump announced he would likely attack Iran soon, and the stock market responded with massive drops across the board, with the Dow losing 953 points.
The leading U.S. stock indices all lost more than 1.5% Wednesday. The S&P 500 fell 1.62%, and the Nasdaq dropped 198%. The Dow Jones lost 1.87%, creating one of the biggest single-day drop-offs in months. The markets reacted harshly to an announcement from Trump saying that negotiations with Iran were dragging on for too long.
As expected, oil prices jumped after the announcement as well, and Brent crude climbed 1.8% while West Texas intermediate added 2.07%. These benchmarks are now at $93 and $90, respectively. Investors should expect the stock market to take a major hit from the news, and stocks considered risky or based on nonessential services and products are likely to be impacted the most, while energy stocks may soar through the end of the week.
Iran Conflict Worsens and Stock Market Backpedals
Early this week, the stock market was bullish, with AI and chip stocks rallying. Micron Technology (MU) climbed incredibly high, alongside Nvidia (NVDA), and Advanced Micro Devices (AMD). These stocks remained elevated through Thursday’s market opening, but they could feel the impact of the worsening of the Iran conflict very soon. Micron stock rose 2.84% Thursday morning, while Nvidia added 1.44%, and AMD surged 5.88% as the chip rally continues unabated for the moment.
Shell (SHEL) gained 1.51% on Thursday, pushed upward by strong investor sentiment for the energy sector. Chevron (CVX) gained 0.26% and BP (BP) added 1.42%. These stocks could be incredibly volatile, however, as the situation in the Middle East unfolds. President Trump has been known to make bold and inflammatory statements and then back away from them within days, and we could see something similar happen here.
Headline inflation is up and higher than it has been in years, climbing above 4% and scaring investors away from the stock market right as stock indices were moving back toward record highs. The swift retreat could plunge market sentiment into a state of Extreme Fear on the Fear & Greed gauge very quickly. Artificial intelligence stocks are still performing well, but their rally could prove short-lived if inflation fears and concerns over the Iran conflict worsen.
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