US stocks today: Dow crashes 444 pts, Nasdaq 2%, S&P over 1% as Iran war hurts US stock markets most in 4 weeks

Wall Street ended sharply lower on Friday, with losses in heavyweights Nvidia and Microsoft, as the U.S.-Israeli war against Iran entered its fourth week, deepening worries about inflation and the potential for higher interest rates. The conflict in the Middle East showed no signs of easing. The U.S. military was deploying a ‌large amphibious assault ⁠ship ⁠with thousands of additional Marines and sailors to the Middle East, while Iran's new supreme leader hailed Iran's "unity" and "resistance."

"The market is finally settling into the idea that this may go on longer than initially expected, and I think that's why markets are selling off. This conflict may go on not for just a few weeks, but maybe beyond several months," said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma.

At close, the Dow Jones fell 444.60 points (-0.97%) to 45,576.83, the S&P 500 dropped 98.17 points (-1.49%) to 6,508.32, and the Nasdaq declined 443.08 points (-2.01%) to 21,647.61.


All the three indices posted their worst four-week loss. Since the start of the Iran war, the S&P 500 has fallen about 5.41%, the Nasdaq has lost about 4.5%, and the Dow has dropped about 6.95% as geopolitical tensions have weighed on market sentiment and risk appetite.

Russell 2000 ends 10.3% below record closing high reached on January 22, confirming the index has been in correction since that date.

MAGNIFICENT SEVEN COMPANIES FALL

Wall Street's most valuable companies declined, with Nvidia , Alphabet, Tesla, Meta Platforms and ⁠Microsoft all ‌losing ground. U.S. Treasuries fell for a third session, in step with a broader selloff in UK and European government bonds, as the Middle East conflict kept oil prices ⁠elevated and reinforced inflation worries.

U.S. rate futures show the Fed is more likely to raise interest rates than cut them by the end of 2026, according to CME's FedWatch tool.

"We just have a classic environment that is pushing rates up and it's driven by higher inflation expectations, which relate back to the oil price. And the fact that we're heading into the fourth week of the war suggests that that stress is not going away anytime soon," said Padhraic Garvey, head of global rates and debt strategy at ING in New York.

Friday marks the once-in-a-quarter simultaneous expiry of derivatives contracts tied to stocks, index options and futures, also known as "triple witching," which can boost trading volume and aggravate volatility.