Wall Street obliterated as Iran war fallout escalates, with tech stocks breaking a key level last seen in the 2025 tariff chaos
With the end of the Iran war nowhere in sight and oil prices on fire, US stocks crashed into the close of trading on Friday.
The tech-heavy Nasdaq stock market index fell 2.2 percent on the day, taking it into correction territory – that’s down more than 10 percent – for the first time since March 2025.
Almost exactly one year ago, US stock markets had tumbled into correction after the Trump administration previewed its big tariff plans, which raised fears of renewed inflation and fresh supply chain disruptions.
Enough of the history lesson: This week marked the third week of the war, including a major escalation in hostilities as Israel attacked Iran’s energy assets and Iran responded by bombing a major Qatar natural gas export facility.
‘If this is an escalation involving troops on the ground, then we’re probably in for at least a couple more weeks of this sort of market of higher oil prices,’ Baird investment strategist Ross Mayfield told CNBC.
Oil prices were off their worst levels on Friday after a tumultuous week: European oil prices had surged more than 13 percent higher at one point, but exited the week up only 7.2 percent – around $107 – while US oil prices rose 2 percent – to around $97.
‘I think that if oil were to hold above $100 for the next three months, we’d likely see very challenging economic conditions in the US,’ Tim Rezvan, managing director oil & gas equity research at KeyBanc Capital Markets, told the Daily Mail.
The Nasdaq Composite is an index of the 100 top stocks on the Nasdaq stock exchange, and includes many leading high-growth tech companies.
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Markets are more nervous by the day about escalation in the Iran war
At its meeting this week, the Federal Reserve warned that the oil price shock had left it uncertain about the economy.
‘Higher energy prices will push up overall inflation,’ said Fed chair Jerome Powell, but it’s still ‘too soon’ to know how this will affect Americans.
On X.com, market expert Mohamed A. El-Erian wrote that the ‘Consensus is shifting, and rightly so: This third week of the war has fueled a shift from a short-term energy disruption to long-term structural damage.’
With central bankers and stock market players growing more nervous by the day about the economy and the war, investors are piling into safe assets like government debt, making high-growth tech stocks less attractive.
That in turn had damaged the value of stocks traded on the Nasdaq more than other exchanges.
The other two leading US stock indexes are close to correction territory: The Dow Jones Industrial Average about a 1.5 percent drop away from being 10 percent off from its most recent high, while the S&P 500 needs to decline another 3 percent or so to enter correction.
All three leading stock market averages posted their fourth losing week in a row.
Investors are moving their money into safe assets and out of risky ones, like tech stocks
Before the 2025 dip, the Nasdaq saw a sudden ‘flash correction’ in August 2024.
A weaker-than-expected jobs report in early August sparked a brief but global recession scare.
The index closed more than 10% below its July peak on August 2, 2024, but fully recovered within weeks.