Wall Street Losses Extend Amid Middle East Tensions

By Noel Randewich and Kanchana Chakravarty

(Reuters) – Wall Street extended losses on Friday following reports from Iranian media that the country launched missiles toward Israel, marking a response to intense Israeli strikes aimed at crippling Iran’s ability to develop nuclear weapons.

Hundreds of ballistic missiles were reportedly launched from Iran toward Israel.

This escalation follows Israeli attacks on nuclear facilities and missile factories in Iran, raising tensions in the Middle East and undermining global investor confidence.

The S&P 500 dropped 1.30% to 5,966.76 points, extending earlier losses. The Nasdaq fell 1.44% to 19,380.43 points, and the Dow Jones Industrial Average decreased 2.02% to 42,097.69 points.

Oil prices surged nearly 7% over fears the conflict could disrupt crude supply from the Middle East. U.S. energy stocks climbed, with Exxon (NYSE:XOM) rallying 2.1% and Diamondback (NASDAQ:FANG) Energy rising 3%.

Elias Haddad, a senior markets strategist at Brown Brothers Harriman, remarked, “It looks as though we could be in for a full-blown military conflict. If it ends up closing down the Strait of Hormuz, where a third of global oil supply goes through, this could have some pretty nasty effects on global markets.”

Airline stocks declined amid concerns about rising fuel costs, with Delta Air Lines (NYSE:DAL) down 3.8%, United Airlines falling 4.7%, and American Airlines (NASDAQ:AAL) decreasing 4.8%.

In contrast, defense stocks gained, with Lockheed Martin (NYSE:LMT) up 3.4%, RTX Corporation rising 3.3%, and Northrop Grumman (NYSE:NOC) increasing by 3.5%.

Of the 11 S&P 500 sector indexes, 10 declined, with financials down 2.22%, followed by information technology, which lost 1.74%.

Adobe (NASDAQ:ADBE), the Photoshop maker, fell 5.3% as worries about its slow AI adoption pace overshadowed an increased annual revenue forecast. Meanwhile, Oracle (NYSE:ORCL) jumped 7% to a record high, gaining over 21% in two days due to positive demand for its AI services.

Nvidia (NASDAQ:NVDA) dipped 2.5%, and Apple (NASDAQ:AAPL) decreased by 1.6%.

Visa (NYSE:V) and Mastercard (NYSE:MA) both lost over 5% after it was reported that major retailers are considering cryptocurrencies to eliminate payment intermediaries.

Shares of Boeing (NYSE:BA) fell 2%.

A tame consumer price report and softer-than-expected producer price data, along with largely unchanged initial jobless claims earlier this week, helped ease investor jitters regarding tariff-related price pressures. U.S. Federal Reserve policymakers are widely expected to maintain interest rates at their meeting next week.

Investors seem optimistic that the U.S. will reach trade agreements that could reduce President Donald Trump’s steep trade barriers, with the S&P 500 trading just below its February record highs. The University of Michigan’s Surveys of Consumers indicated that consumer sentiment improved for the first time in six months in June amid trade uncertainty.