The S&P 500 Index fell 1.74% on Thursday, with the Nasdaq 100 dropping 2.38% to a 6.5-month low, as escalating tensions in Iran and surging oil prices weighed heavily on market sentiment. WTI crude oil prices surged over 4% amid reports of potential U.S. military action against Iran, raising inflation expectations and prompting a spike in bond yields, with the 10-year T-note yield climbing to 4.42%. The overall market was further pressured by a notable decline in technology stocks, particularly chipmakers, following news of a new AI memory compression technique.

This sell-off highlights the interconnectedness of geopolitical events and market performance, particularly in sectors sensitive to energy prices and inflation. The OECD’s increased inflation forecast and concerns over potential disruptions in oil supply due to the conflict in Iran add to the bearish outlook.

Market professionals should closely monitor developments in the Middle East and their implications for energy prices and inflation, as these factors could significantly influence Fed policy and overall market dynamics in the near term.

Source: nasdaq.com