U.S. stocks are down as the deadly Israeli strike against Iran ignites fears of a regional war in the Middle East.
Major U.S. stock indices fell Friday, June 13, as fears of a regional war fueled risk-off sentiment. The Dow Jones Industrial Average dropped 525.80 points, or 1.22%, with nearly all major stocks trading in the red. The S&P 500 slipped 0.54%, while the tech-heavy Nasdaq was down 100 points, or 0.53%.
Markets are rattled by the potential economic fallout of escalating tensions between Israel and Iran. Israel carried out a series of deadly attacks on Iranian military and nuclear facilities. The Israeli government claimed Iran’s nuclear program poses an existential threat, while Iran vowed to deliver a “legitimate and powerful response.”
Altcoins hit hard by global tensions
The escalating conflict is causing traders to rethink exposure to high-growth and high-risk assets like tech stocks. Notably, Nvidia fell 1.5%, and Apple declined 1% following the attacks. Simultaneously, investors rotated into traditional safe havens such as gold and the dollar.
Consequently, crypto was among the most affected asset classes by Middle East tensions. The overall crypto market cap was down 2.7%, while Bitcoin (BTC) was down 2.19%, falling to $105k. Major altcoins like Ethereum (ETH) and Solana (SOL) were hit even harder, dropping 7.1% and 7.45% respectively.
Fears of a war between Iran and Israel contributed to surging oil prices. Crude oil was up 14% at one point, to a high of $79 per barrel. Iran sits at the Persian Gulf, a critical region for global oil production, close to some of the world’s largest oil producers.
Rising oil prices are also fueling renewed inflation fears. This comes at a time when U.S. tariffs on major trading partners are expected to add additional inflationary pressure. The growing uncertainty may reduce the likelihood of interest rate cuts by the Federal Reserve, a negative signal for both tech and crypto markets.
