US markets closed sharply lower on Friday on the back of the escalating conflict between Israel and Iran. Investors dumped equities and sought shelter in traditional safe havens, amid growing fears that the violence could spiral into a broader regional war.
The Dow Jones Industrial Average tumbled 769 points, or 1.79%, to close at 42,197.79—its worst single-day performance in months. The S&P 500 fell 1.13% to 5,976.97, while the Nasdaq Composite dropped 1.30% to 19,406.83.
The losses wiped out the week’s modest gains, pushing all three major indexes into negative territory. For the week, the Dow dropped 1.3%, the S&P shed 0.4%, and the Nasdaq fell 0.6%.
Energy, defence rise as risk assets slump
The sell-off began Thursday night, as reports emerged of Israeli airstrikes on Iranian nuclear and military targets. By Friday morning, as Iran launched retaliatory missile attacks, the downturn deepened.
Tech leaders such as Nvidia, which had helped power recent market recoveries, were among the hardest hit as traders shed risk. But not all sectors suffered. Oil and defense stocks bucked the trend, with ExxonMobil rising 2% and Lockheed Martin and RTX climbing more than 3%.
Gold touched a two-month high.
Fed, tariffs and Trump in focus
Amid the geopolitical volatility, markets are also bracing for next week’s Federal Reserve meeting. While no rate change is expected, investors will be watching for any signal on how the central bank views Trump’s recent tariff threats and the growing global uncertainty.
President Trump, speaking from the G7 summit in Canada, insisted the US had no role in the Israeli attacks but warned Iran against targeting American interests.
Consumer sentiment bucks the gloom
One bright spot: the University of Michigan’s consumer sentiment index rose to 60.5 in June, well above expectations.
Commodities and the dollar
Brent crude is trading 7.02% higher at US$74.23 a barrel.
WTI crude is trading 7.26% higher at US$72.98 a barrel.
Spot gold is trading 1.37% higher at US$3,432.34 an ounce.
Gold futures (COMEX) are trading 1.48% higher at US$3,452.80 an ounce.
One Australian dollar is buying 64.86 US cents.
Futures
The SPI futures are pointing to a 20 point fall.
