Dow Jones fall 300 points as oil surge, Iran war fears rattle markets

Wall Street opened lower on Friday, as the ongoing Middle East conflict continued to weigh on investor sentiment despite a delay in potential US military action against Iran’s energy infrastructure.

The Dow Jones Industrial Average fell 333 points, or 0.7%, while the S&P 500 slipped 0.6% and the Nasdaq 100 declined 0.75%.

The cautious tone followed a volatile session on Thursday, when major indexes closed lower, and the Nasdaq confirmed it had entered correction territory.

The S&P 500 and the Nasdaq are now on track for their fifth consecutive week of losses, while the Dow remains the only index poised for weekly gains. 

The Nasdaq has dropped more than 10% from its October record high, while the Dow is nearing correction territory, down over 9% from its peak. 

The S&P 500 is about 7% below its record level.

Oil prices continued to climb amid fears of supply disruptions tied to the conflict. 

Brent crude rose 2% to above $110 per barrel, while US West Texas Intermediate futures gained 2% to trade above $96. 

The rise in crude has added to inflation concerns and weighed on equities.

Headline-driven markets reflect geopolitical uncertainty

Markets remain highly sensitive to developments surrounding the Iran conflict, with investors reacting to conflicting signals from both sides.

President Donald Trump said he would again extend a deadline, asking Iran to reopen the Strait of Hormuz or face the destruction of its energy plants. 

He later confirmed a pause in military action until April 6.

“As per the Iranian Government's request, please let this statement serve to represent that I am pausing the period of Energy Plant destruction,” Trump said in a Truth Social post. “Talks are ongoing and, despite erroneous statements to the contrary by the Fake News Media and others, they are going very well. Thank you for your attention to this matter!”

However, Iran has signaled reluctance to engage, with its foreign minister reportedly saying Tehran has no intention of holding talks with the US, even as it reviews a proposal to end the war.

“Financial markets remain headline-driven. Investors are being buffeted by US claims that progress is being made to end hostilities, while Iran denies that any serious negotiations are taking place,” said David Morrison, senior market analyst at Trade Nation. “It seems obvious that neither side is close to accepting the other's conditions for peace so for now, the war continues.”

The uncertainty has extended to the Strait of Hormuz, a key global shipping route. 

Iran’s Islamic Revolutionary Guard Corps has warned of restrictions, with reports indicating disruptions to vessel movement in the area.

Inflation fears rise as investors brace for prolonged volatility

The spike in oil prices has brought inflation concerns back into focus, complicating the outlook for central bank policy. 

Money markets are no longer pricing in any interest rate cuts from the US Federal Reserve this year, compared with expectations for two cuts before the conflict began.

Investor caution remains elevated. 

Despite the broader market weakness, some individual stocks moved higher. 

Shares of Unity Software jumped about 12% in trading after the company reported preliminary first-quarter revenue above analysts’ expectations.

As geopolitical tensions persist and oil prices remain elevated, markets are likely to stay volatile. 

Investors are closely watching diplomatic developments, economic data, and central bank signals for clearer direction in the weeks ahead.