Wall Street slides as oil surge, Iran war fears drag Dow Jones 470 points lower

Wall Street’s main indexes fell sharply on Thursday, with the Nasdaq Composite confirming a correction as escalating tensions in the Middle East rattled investor sentiment.

Concerns over the ongoing conflict involving the US, Israel, and Iran pushed oil prices higher and intensified inflation worries, triggering a broad-based selloff in equities.

The S&P 500 dropped 1.74%, while the Nasdaq Composite slid 2.38%.

The Dow Jones Industrial Average fell 1.01%, shedding 470 points.

The tech-heavy Nasdaq is now down more than 10% from its October 29 record high, confirming it has entered correction territory.

Oil prices surged amid uncertainty over supply disruptions, particularly around the Strait of Hormuz.

US crude futures settled up 4.6%, while Brent crude climbed 5.7%.

Rising yields on the 10-year and 2-year US Treasury notes added further pressure on equities.

The rally in crude came as geopolitical uncertainty deepened.

President Donald Trump said Iran must make a deal with the US or face continued military pressure, warning that taking control of Iran’s oil remained an option.

At the same time, a senior Iranian official described the US proposal to end the conflict as “one-sided and unfair,” highlighting the lack of progress in diplomatic efforts.

Uncertainty rises as diplomacy stalls and economic risks grow

Markets reversed gains from Wednesday, when investors had bet on a potential de-escalation in tensions.

Instead, conflicting signals and the absence of concrete diplomatic progress heightened uncertainty.

Adding to the cautious tone, the OECD warned that the conflict has knocked the global economy off a stronger growth path, with the near-closure of the Strait of Hormuz threatening to push inflation sharply higher.

Traders have also scaled back expectations for Federal Reserve rate cuts this year, with no easing now priced in, according to CME Group’s FedWatch Tool.

Tech and communication stocks lead declines

Losses were widespread across sectors, with most of the S&P 500’s 11 major industry groups ending lower.

Energy stocks were the only major gainers, benefiting from the sharp rise in oil prices.

Technology and communication services stocks led the declines.

The Philadelphia Semiconductor Index tumbled after three sessions of gains, dragging down chipmakers including NVIDIA.

The communications sector also came under pressure after jurors found Meta and Alphabet liable in early trials linked to lawsuits accusing social media firms of harming children.

Despite a slight increase in weekly US jobless claims, the labor market remained stable, giving the Federal Reserve room to hold interest rates steady as it monitors the economic fallout from the conflict.

Meanwhile, political rhetoric continued to influence market sentiment.

Trump said recent oil price gains and market pressure were not as severe as expected, adding, “It’s all going to come back down to where it was and probably lower.”

In a separate statement, he warned Iran that it “better get serious soon, before it is too late, because once that happens, there is NO TURNING BACK, and it won’t be pretty.”

As geopolitical uncertainty persists and oil prices remain elevated, markets are likely to stay volatile, with investors closely watching developments in the Middle East for clearer direction.