Wall Street falls to its worst drop since the Iran war as the Nasdaq sinks 10% below its record

Markets Tumble as Iran War Fears Intensify, Oil Prices Surge

Stocks plunged Thursday as renewed pessimism about the Iran conflict gripped Wall Street, erasing earlier hopes of a potential ceasefire. The S&P 500 dropped 1.7% in its worst single-day performance since January, putting it on track for a fifth consecutive weekly decline—the longest losing streak in nearly four years.

The Dow Jones Industrial Average fell 469 points, or 1%, while the tech-heavy Nasdaq composite tumbled 2.4%, pushing it more than 10% below its early 2024 peak—a decline that market professionals classify as a correction.

This latest market volatility follows a week of rapidly shifting investor sentiment. Initial optimism sparked by President Trump’s mention of “productive talks” about ending the conflict quickly faded after Iranian officials denied direct negotiations were underway and subsequently rejected a U.S. ceasefire proposal delivered through Pakistani intermediaries.

As fighting continued Thursday, Iran tightened its control over the strategically vital Strait of Hormuz, a narrow waterway through which approximately 20% of the world’s oil typically passes. Reports suggest Iran may be establishing what analysts describe as a “toll booth” system for oil tankers traversing this crucial shipping lane.

The escalating tensions sent Brent crude oil prices surging 4.8% to $101.89 per barrel, while U.S. benchmark crude rose 4.6% to $94.48. These figures represent substantial increases from the roughly $70 per barrel price before the conflict began, raising concerns about inflationary pressures throughout the global economy.

“They better get serious soon, before it is too late,” Trump warned on his social media platform Thursday morning, referring to Iranian negotiators. “Because once that happens, there is NO TURNING BACK, and it won’t be pretty!”

Shortly after markets closed, however, Trump adopted a more conciliatory tone, postponing his threat to “obliterate” Iranian power plants until April 6 to allow additional time for negotiations. “Talks are ongoing and, despite erroneous statements to the contrary by the Fake News Media, and others, they are going very well,” he stated.

This late announcement prompted oil prices to retreat slightly from their session highs, with Brent crude falling back toward $100 per barrel. Treasury yields also moderated their earlier increases.

The bond market has experienced significant disruption during the conflict, with the 10-year Treasury yield jumping to 4.43% Thursday from 4.33% the previous day and just 3.97% before hostilities began. This rapid rise has already translated into higher mortgage rates and increased borrowing costs for U.S. households and businesses, potentially slowing economic activity.

Meanwhile, a Thursday morning report indicated a slight increase in weekly unemployment claims, though numbers remain historically low. Despite this signal of potential labor market cooling, expectations for Federal Reserve interest rate cuts this year have diminished substantially. Investors entered 2026 anticipating several rate reductions, but escalating oil prices have heightened inflation concerns, complicating the Fed’s policy calculations.

Technology stocks bore the brunt of Thursday’s selling pressure. Meta Platforms dropped 8% and Alphabet declined 3.4%, extending losses following a jury verdict that found Instagram and YouTube liable in a landmark social media addiction trial. While the financial penalties were relatively modest compared to the companies’ profits, the ruling could represent a watershed moment inviting additional litigation against tech platforms.

Other major technology names also retreated, with Nvidia falling 4.2% and Amazon losing 2%. Apple was a rare exception, edging up 0.1%.

The market decline extended globally, with Germany’s DAX falling 1.5%, Hong Kong’s Hang Seng dropping 1.9%, and South Korea’s Kospi plunging 3.2%. Japan’s Nikkei 225 experienced a comparatively modest decline of 0.3%.

With the S&P 500 now 7.2% below its record high set earlier this year, investors face increasing uncertainty as geopolitical tensions, energy market disruptions, and monetary policy concerns converge to create a challenging investment landscape.