Key Takeaways
- Following Trump’s national address, the Dow Jones plummeted over 600 points as hopes for a swift Iran conflict resolution evaporated
- Both the S&P 500 and Nasdaq tumbled 1.2% and 1.7% respectively during Thursday’s trading session
- WTI crude prices exploded 13% higher, breaking above $113 per barrel—the steepest one-day rally since May 2020
- Risk assets including Bitcoin experienced declines in tandem with equity markets
- Market volatility intensified as the VIX spiked to 27.66, signaling heightened investor fear
Investors anxiously awaited President Trump’s Wednesday evening speech, anticipating a roadmap to de-escalate the US-Israeli military campaign against Iran. Those expectations were shattered.
Equity markets experienced a brutal Thursday morning selloff following the address, which provided no concrete path toward conflict resolution. The Dow Jones Industrial Average plunged more than 600 points, representing approximately a 1.3% decline. Meanwhile, the S&P 500 shed 1.2% and the Nasdaq Composite tumbled nearly 2%.
Energy markets told a completely different story. West Texas Intermediate crude skyrocketed 13%, pushing prices beyond $113 per barrel—marking the most substantial daily percentage increase since May 5, 2020. Brent crude wasn’t far behind, climbing 8% to surpass $109 per barrel.
Since hostilities commenced in late February, Brent crude has surged approximately 50%. A temporary dip earlier in the week had sparked cautious optimism among traders, but Thursday’s presidential address swiftly extinguished that sentiment.
In his remarks to the nation, Trump vowed to “hit Iran hard” with plans to “send them back to the Stone Age.” Furthermore, he indicated the US would intensify military operations over a two-to-three-week period before considering withdrawal. Wall Street had been anticipating a much quicker resolution timeline.
Bespoke Investment Group co-founder Paul Hickey captured the market sentiment perfectly. “Leading up to last night’s address, there was some optimism that he would lay out a path of ending the hostilities,” he explained. “We got neither.”
The strategically vital Strait of Hormuz continues to be a focal point of concern. This crucial waterway for international oil shipments has remained under intense scrutiny throughout the conflict.
Technology Stocks and Cryptocurrency Under Pressure
Semiconductor stocks bore the brunt of Thursday’s decline. Major players like Nvidia and Broadcom retreated as the broader technology sector experienced widespread selling. Memory chip manufacturers and other growth-oriented equities that had rallied Tuesday and Wednesday on optimism for peace quickly surrendered those gains.
Bitcoin tumbled in lockstep with other risky assets. Digital currency markets have been responding to the same geopolitical uncertainties that have pressured stocks throughout recent weeks.
The CBOE Volatility Index, commonly referred to as the VIX, jumped 3.12 points to reach 27.66. This elevated reading indicates significant investor apprehension and market uncertainty ahead.
Rosenberg Research’s David Rosenberg observed that Thursday’s market turmoil coincided with the one-year anniversary of President Trump’s “Liberation Day” tariff proclamations, which similarly disrupted financial markets.
“Hopes for a quick wind-down of the Iran war faded,” Rosenberg noted. “Trump did not provide any off-ramp from the escalation path. Rhetoric has become harsher.”
Bond Yields Climb Amid Renewed Stagflation Concerns
Treasury yields advanced across the curve. The 2-year note yield increased to 3.83% while the 10-year yield pushed higher to 4.35%. Surging energy prices have revived anxieties about stagflation—an economic scenario characterized by simultaneous inflation acceleration and growth deceleration.
Rosenberg observed that “worries about oil prices and stagflation are partly being balanced by lingering hopes that the war will not drag too far into the year.”
Thursday marked the final trading day of a week shortened by the holiday calendar. Markets will remain shuttered on Good Friday. Market participants will be closely monitoring the March employment report, scheduled for Friday release, seeking additional insights into US economic resilience.
Weekly jobless claims figures published Thursday morning revealed an unanticipated decline, indicating the labor market has maintained relative strength despite the ongoing geopolitical tensions.
