Wall St. drops sharply as Iran strikes back at Israel's attack

Wall Street closed sharply lower Friday, after Iran fired missiles towards Israel in response intensive Israeli strikes designed to cripple Tehran's nuclear weapons-building capability.

Israel's military spokesperson said that missiles fired by Iran were the cause of the explosions and sirens heard across the country. This came after Israel attacked nuclear facilities and missile plants in Iran. Tensions escalated in the Middle East, and investor confidence was undermined. Fears that the conflict would disrupt Middle East crude supplies pushed oil prices up nearly 7%. Exxon Energy and Diamondback Energy, both U.S. Energy stocks, rose at the same time.

Elias Haddad said on Friday that it appeared as if we were heading for a full-blown conflict. If it closes down the Strait of Hormuz where a third of world oil supplies pass through, that could have a pretty bad effect on global markets.

Fears that fuel prices could rise caused airlines to sell off their stock.

Lockheed Martin, RTX Corporation, and Northrop Grumman were all up.

The S&P 500 dropped 68.92, or 1.14 %, to 5,976.34 while the Nasdaq Composite fell 254.13, or 1.29 %, to 19,407.49. The Dow Jones Industrial Average dropped 768.73, or 1.79% to 42,198.89. Adobe, the maker of Photoshop, fell on concerns about the pace at which the company adopted AI. This overshadowed a forecast for increased revenue. Oracle shares jumped for the second consecutive day to new highs after the company's upbeat outlook was fueled by demand for AI services. Visa and Mastercard fell following a Wall Street Journal report that major retailers were exploring cryptocurrency that could eliminate intermediaries. Investors were calmed by a tame consumer prices report, lower-than-expected producer prices and relatively unchanged initial unemployment claims in the first week of this month. The Federal Reserve is widely expected to maintain interest rates at its meeting next week. Investors are betting that the United States will achieve trade agreements to reduce President Donald Trump’s high trade barriers. The S&P 500 now trades just below its record highs from February. In June, the University of Michigan's Surveys of Consumers revealed that consumer sentiment had improved for the first six-month period amid trade uncertainty.

(source: Reuters)