- U.S. stocks fall as Iran tensions trigger early selloff.
- Trump tanker escort pledge helps markets trim losses.
- Semiconductor stocks drop; Broadcom declines before earnings.
- Oil surges then retreats; Bitcoin holds above $68,000.
U.S. stocks fell in the end of the day but surged out of the heavy losses in the early morning due to the guarantee by President Donald Trump to secure energy deliveries via the Strait of Hormuz, which helped to erase the threat of a long-term effect on global oil supplies. S&P 500 dropped 64.99 or 0.94 at 6,816.63, having dropped as much 2.5 percent earlier.
The Dow Jones Industrial Average fell by 403.51 or 0.83 to end at 48,501.27 whereas Nasdaq Composite dropped by 232.17 or 1.02 to end at 22,516.69. As geopolitical tensions heightened, volatility shot up over the course of the session, according to Reuters data.
CBOE Volatility Index or the so-called fear gauge of the market surged to its highest point in the market since April 2025 and later went down in the day and eventually settled at 23.57 up 9.93. The Russell 2000 index of small-cap companies dropped 1.79 per cent to 2,608.36, which indicated a larger measure of risk aversion in the early trading day.
The markets first plummeted when Trump promised to spare no cost in resolving the war with Iran and it triggered the fear that the hostilities were going to escalate hence interfering with the energy supply channels in the Middle East. Once the Dow fell by almost 1300 points in a rush by investors into safe-haven assets and a soaring crude oil price. Oil markets responded intensely to the geopolitical build up. U.S. West Texas Intermediate crude shot up above 9 per cent intra-day and then lost out on profits. At the end, the WTI April futures contracts were up 4.67 percent and closed at 74.56 per barrel. May futures of the brent crude increased by 4.71 per cent and 3.66 to close at $81.40.
Trump Intervention Overturns the Market
This was changed when Trump issued a statement in the afternoon in Truth Social that described the solutions to make sure that the energy shipments continued in the Gulf region. I have instructed the U.S. International Development finance corporation (DFC) to offer political risk insurance and financial security guarantees at affordable rates to all marine trade that traverses the Gulf region particularly those that involve energy shipments, Trump said, as effective immediately.
He said that the U.S Navy was allowed to escort tankers in the Strait of Hormuz in case there was need, and the United States would not fail to make sure that energy flows freely to the world. The news provoked an immediate change of mood in the market. Oil prices fell down on the highs of the session, as did the U.S. dollar and Treasury yields, which went on a spurt at the beginning of the day. The return of the 10 year U.S.
Treasury note was trading around the 4.10% mark before settling down. Reuters data shows that the 10-year yield was closed 2.8 basis points higher on the day and the two-year Treasury yield was close to 4 basis points higher. Adam Turnquist of LPL financial stated that, the policy commitment contributed towards allaying the fears of investors of a radical upheaval of world supply chains.
The action eased any concern of a lengthy energy market shock and lowered inflationary concerns and helped the afternoon equities recovery, he said. According to Fawad Razaqzada of Forex.com, the market is still very sensitive to the geopolitical headlines. News headlines in the market are currently very influential. A lot is about whether the tensions will stabilize or it is the start of long-term disruptions of global supply chains, he said.
Technology and Semiconductors Lead Slumps
In spite of the late session turnaround, technology stocks were still feeling the heat which helped the Nasdaq to fall more than the key indices. The sector that recorded losses was the semiconductor sector. The Philadelphia Semiconductor Index fell 4.58% to end at 7,764.88, and the U.S. semiconductor exchange-traded fund fell 3.77.
Broadcom stock decreased 1.56 percent before its next earnings announcement. Other chipmakers were also crashing with the Taiwan Semiconductor U.S.-traded shares falling 4.27 percent and Advanced Micro Devices falling 3.86 percent. Performance was both good and poor among large technology companies.
Microsoft was up by 1.35 percent, Meta Platforms increased by 0.23 percent and Amazon by 0.16 percent. Apple dropped 0.37 per cent, Alphabet dropped 0.96 per cent, Nvidia dropped 1.33 per cent and Tesla dropped 2.70 per cent. The so-called magic seven index dropped 0.51 percent, indicating still-apprehensive investor actions in the technology pricing and a capital spending problem associated with artificial intelligence infrastructure. Some analysts also cited a technical aspect that has an effect on the volatility of the market.
According to Michael Ball, macro strategist with Bloomberg Markets Live, the fall below the 6,800 in intraday trading put the S&P 500 in a negative gamma range where market swings may escalate as market makers realign hedging positions. Commodity markets were as volatile as well. During the session, gold prices fell by more than 4% and briefly dipped below 2,500 per ounce, and silver fell by more than 12 percent and then leveled.
Analysts attributed the sharp moves to changing inflation expectations and profit-taking following the recent safe-haven rallies. The U.S. Dollar Index shot to its highest point since late November at the beginning of the session and then declined by slightly less than 0.6 percent at the end of the day. The markets of cryptocurrency were relatively stable. Bitcoin was also trading above 68,000, and Ethereum was trading near 2,000 without much response to the overall market volatility.
The European markets, outside of the United States, also faced pressure as the market was put under the pressure of the geopolitical risks and increased prices of energy. PAN-Europe STOXX 600 index dropped 3.08 percent to 604.44, one of the sharpest falls in months. Although the day has recuperated the drastic losses, investors are still apprehensive due to the geopolitical events that are still affecting energy markets, inflation anticipations and the global financial situation.
