Israel’s airstrikes on Iran’s nuclear facilities triggered a sharp sell-off in U.S. stocks, with key indexes falling and oil prices soaring amid intensifying geopolitical risk.
At a Glance
- U.S. benchmarks opened Friday lower following Israeli strikes on Iranian nuclear sites and leadership
- Oil surged over 6%, Brent crude rising to around $74 per barrel
- Stocks in aerospace, defense, and energy sectors saw gains amid market volatility
- Safe-haven assets like gold and U.S. Treasuries strengthened, while growth names like Nvidia and Tesla dropped
- Investors are now eyeing next week’s Federal Reserve meeting amid rising inflation concerns
Market Turmoil Amid Preemptive Strikes
On June 13, 2025, Israel launched “Operation Rising Lion,” targeting nuclear and military infrastructure in Iran, along with the homes of several commanders—reportedly killing senior IRGC leaders and nuclear scientists, according to Newsmax reporting. In response, Iran fired over 100 drones, most of which were intercepted by Israeli and allied defenses, fueling fears of a broader conflict.
At the opening bell, the Dow dropped roughly 388 points (‑0.9%) to 42,579, while the S&P 500 and Nasdaq Composite slid around 0.7% and 1.1%, respectively, reflecting heightened risk-off sentiment amid uncertainty over escalation.
Surge in Oil and Defensive Plays
Oil markets reacted swiftly, with U.S. crude jumping over 6% and Brent crude reaching nearly $74 per barrel. The spike triggered a sell-off in transportation equities, with United Airlines falling 4.7%. Meanwhile, energy giants Exxon Mobil and ConocoPhillips saw gains as investors rotated into oil producers.
Defense and aerospace stocks surged. The iShares U.S. Aerospace & Defense ETF (ITA) climbed, buoyed by gains in Lockheed Martin (+3%), RTX (+1.9%), and L3Harris, all reflecting rising defense sector optimism amid the regional escalation.
Watch a report: Market Jitters After Israel‑Iran Strikes.
Flight to Safety: Bonds, Gold, Dollar
As equity volatility deepened, U.S. 10‑year Treasury yields edged up to around 4.36%, while bond prices rose. Gold climbed roughly 1% to $3,458 per ounce, with analysts citing investor refuge flows amid geopolitical stress. Concurrently, the dollar strengthened on global safe-haven demand.
Looking Ahead: What Investors Should Watch
Markets are now eyeing whether the Israel-Iran exchange intensifies or cools, a variable that could determine near-term asset direction. The upcoming Federal Reserve meeting adds another layer of complexity, with potential inflation pressures from higher oil threatening to influence policy stance.
Equity volatility is likely to persist as investors weigh conflict risk, inflation dynamics, and monetary policy. Analysts suggest that defensive sector exposure and risk diversification could be prudent in the coming weeks.
