Wall Street Tumbles as Israel-Iran Tensions Ignite Global Market Jitters
Dow dives over 770 points, oil and defence stocks soar, while travel sector reels from rising fuel fears

New York, June 13: Thursday’s market session wasn’t just another bad day on Wall Street. It was a gut punch—sharp, sudden, and geopolitically loaded. As news of a direct Israeli airstrike on Iranian military assets broke early in the day, traders reacted the way they often do when the world seems poised on a knife’s edge: sell first, ask questions later.
Market Reaction: No Room for Hesitation
The Dow Jones Industrial Average dropped a staggering 770 points, or roughly 1.8%, closing just shy of 42,200. The Nasdaq Composite and S&P 500 weren’t far behind, sinking 1.3% and 1.1%, respectively. What began as quiet unease morphed into a full-blown retreat by midday, with screens across trading desks awash in red.
This wasn’t about earnings or inflation numbers. The trigger was the Israeli military’s reported strike on key Iranian nuclear and military infrastructure—an operation said to have eliminated top IRGC commanders. Tehran didn’t wait long to respond, reportedly launching missile and drone barrages at Israeli targets.
By mid-afternoon, it wasn’t just stocks taking a hit. Sentiment had clearly shifted.
Oil Rockets Up—With Good Reason
One of the earliest and most dramatic ripples came in oil prices. Crude futures went vertical—WTI crude surged past $73, and Brent wasn’t far behind at $74. The concern? The Strait of Hormuz. A fifth of the world’s seaborne oil flows through that narrow chokepoint, and any hint of conflict in the region immediately makes traders nervous.
It wasn’t just speculation. Energy stocks responded in kind. Exxon Mobil closed up nearly 1.7%, while others in the oil patch followed. Energy ETFs saw their heaviest inflows in weeks, as funds scrambled to hedge exposure.
Military Stocks: The Day’s Clear Winners
As oil rallied, defence contractors stepped into the spotlight. Lockheed Martin, Northrop Grumman, RTX Corp.—all posted solid intraday gains, with moves in the 2.5% to 3.2% range. Not entirely surprising, given the context. In times of rising military conflict, markets tend to price in future procurement, both foreign and domestic.
Analysts tracking global arms flows noted a clear uptick in speculative buying across the board. There’s an assumption, perhaps premature, that more orders could be in the pipeline depending on how this situation evolves.
Airlines: The Casualties of the Day
On the flip side, airline stocks got hammered. There’s no delicate way to say it—rising fuel costs are a body blow. Delta, United, American Airlines—down between 3.7% and 4.7%. That’s a meaningful drop in a single session.
If oil stays elevated, summer travel season could lose some of its shine. Carriers are already running lean, and with demand still adjusting post-COVID, profit margins don’t have much room to absorb another surge in operating costs.
Fear Creeps In: VIX Surges
The Cboe Volatility Index (VIX) leapt nearly 20%—a clear signal that investors are hedging hard. And not just in equities. Gold popped 1.5%, and Treasuries saw inflows despite the inflation backdrop, suggesting risk-off sentiment is very much back in play.
What’s more, this comes just a week ahead of the next Federal Reserve meeting. Before Thursday, the conversation was about rates, inflation, and whether Powell would stick to a dovish tone. Now? That’s all murkier. Markets hate uncertainty, and they got a full dose of it today.
Looking Ahead: Stability or Spiral?
It’s too soon to say how this plays out. Markets may stabilize if the conflict cools, but if the back-and-forth continues or expands regionally, all bets are off. The tension in trading rooms isn’t just about missiles—it’s about what this means for global supply chains, inflation, energy policy, and central bank strategy.
For now, investors are leaning into the familiar playbook: energy, defence, gold. But beneath that tactical shift lies a deeper unease. Wall Street had grown comfortable—maybe too comfortable. Today served as a blunt reminder that in a globalized world, geopolitics isn’t just background noise. Sometimes, it’s the main event.
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Arpit Thakur is a Reporting Fellow at Hindustan Herald, dedicated to covering the dynamic world of business and finance. A student at Amity University, Noida, Arpit leverages his academic insights to provide daily, well-researched analyses of market trends, corporate developments, and economic policies. He is committed to delivering clear and impactful financial news to our readers.