Dow Plunges 750 Points as Israel Hits Iran; Oil Jumps, Airlines Sink on War Jitters

Wall Street plunged on Friday after Israel launched military strikes against Iranian nuclear facilities, triggering an immediate retaliatory response from Tehran and heightening fears of a broader conflict in the Middle East. The Dow Jones Industrial Average suffered a massive 770-point drop, while oil prices surged and airline stocks sank sharply.

Major Indices Slide as Conflict Triggers Market Jitters

The S&P 500 declined 68 points or 1.1%, closing at 5,977, while the Dow Jones Industrial Average tumbled 770 points, or 1.8%, to end at 42,198. The tech-heavy Nasdaq Composite fell 1.3%, dragged lower by investor concerns that the Israel-Iran military escalation could disrupt global stability, affect trade routes, and fuel inflationary pressures.

Highlights:

• Dow Jones plunged 770 points to 42,198, its worst single-day decline in weeks.

• S&P 500 dropped 1.1%; Nasdaq Composite lost 1.3%.

• Analysts fear prolonged conflict could destabilize global equity sentiment.

Oil Prices Surge Over 7% as Geopolitical Risk Grips Energy Markets

In response to the Israeli military offensive and Iran’s counterstrike involving over 100 drones, energy markets witnessed sharp gains. U.S. benchmark West Texas Intermediate crude rose 7.3% to $72.98 a barrel, while Brent crude climbed 7% to $74.23 per barrel. Market strategists say the intensifying Middle East tensions are increasing the likelihood of supply disruptions, especially if Tehran escalates its military response.

Highlights:

• WTI crude jumped 7.3% to $72.98/barrel; Brent rose 7% to $74.23.

• Iran’s retaliation heightens fears of broader regional oil supply shocks.

• Strait of Hormuz blockade risk is low for now, analysts say.

Airlines, Cruise Operators Hit Hard by Soaring Oil and Travel Woes

Airlines and travel-dependent stocks bore the brunt of Friday’s selloff. Fuel-sensitive carriers and cruise operators slumped on the double blow of rising oil prices and worsening travel sentiment. United Airlines plummeted 4.4%, Delta Air Lines fell 3.8%, and Norwegian Cruise Line Holdings dropped 5%. The travel sector is particularly vulnerable in times of geopolitical uncertainty, where elevated fuel costs coincide with reduced demand.

Highlights:

• United Airlines: ↓ 4.4%; Delta Air Lines: ↓ 3.8%; Norwegian Cruise: ↓ 5%.

• Travel and tourism stocks dragged by fuel inflation and geopolitical risks.

• Defense stocks rallied as investors sought safety in military-industrial names.

Washington and Tehran Engage Diplomatically as Conflict Looms

While Israel hinted at a multi-day campaign targeting Tehran’s nuclear program, Iran’s response was immediate, though reportedly intercepted by Israeli defense systems. Meanwhile, President Donald Trump continues to push for a nuclear deal with Tehran. U.S.-Iran talks are scheduled in Oman on Sunday, signaling potential for a diplomatic off-ramp amid rising tensions.

Highlights:

• President Trump seeks nuclear deal with Iran to avert wider war.

• Israel warns of continued military strikes in coming days.

• Iran’s response so far viewed as measured; further escalation possible.

Oil Flow Risks and Global Markets on Alert

Strategists warn that while Iran has not moved to close the Strait of Hormuz—a vital chokepoint for global oil shipping—the option remains a critical wildcard. Iran currently sells most of its oil to China, and a full shutdown of the strait would hurt its own exports, which are already under heavy sanctions.

Highlights:

• Strait of Hormuz remains open but is seen as potential flashpoint.

• Iran unlikely to disrupt flow due to reliance on Chinese crude trade.

• Broader markets show sensitivity to any escalation along energy corridors.

Other Market Reactions: Boeing, Bitcoin, and Defense Sector

Beyond energy and travel, the conflict reverberated across multiple sectors. Boeing shares declined 1.7% after a fatal crash involving its 787-8 Dreamliner in India, further compounding the company’s woes. Bitcoin also edged lower, a reflection of risk-off sentiment across digital assets. Meanwhile, defense stocks rallied amid rising military expenditure expectations.

Highlights:

• Boeing shares fell 1.7% after Dreamliner crash in India.

• Bitcoin dropped as investor sentiment turned sharply risk-averse.

• Defense sector saw gains amid anticipation of increased spending.

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