[New York Stock Market Briefing] Major Indexes Plunge Amid Escalation Between Israel and Iran... Dow Down 1.79%

The three major indexes of the New York Stock Exchange (NYSE) fell simultaneously. As Iran launched large-scale missile strikes targeting Israel, investor sentiment quickly froze and stock prices declined.

On the 13th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average plummeted by 769.83 points (1.79%) to close at 42,197.79. The S&P 500 Index dropped 68.29 points (1.13%) to 5,976.97, while the tech-heavy Nasdaq Composite Index lost 255.66 points (1.30%) to finish at 19,406.83.

The escalating military conflict between Israel and Iran increased risk aversion sentiment.

As a result, the market opened lower that day. The previous day, Israel had bombed key Iranian sites, resulting in the deaths of dozens of top Iranian commanders and nuclear scientists, which sparked expectations of Iranian retaliation.

After opening, the indexes narrowed their losses temporarily. Although Iran declared it would retaliate, expectations grew that its military capabilities might be limited, somewhat easing concerns about further escalation.

However, in the afternoon, as Iran launched large-scale missile strikes against Israel, the indexes expanded their losses again.

Iran’s state-run IRNA news agency reported that “hundreds of various ballistic missiles were fired toward Israel,” and the Israeli military also detected dozens of incoming missiles, triggering air raid warnings nationwide.

The Israeli military reported that most of the missiles were intercepted during the attack. Still, the Israeli military stated, “By targeting civilian areas, Iran has crossed a ‘red line’,” warning, “Iran will pay a significant price.” This suggested a possible retaliatory strike against Iran.

Mark Malek, Chief Investment Officer (CIO) at Siebert Financial, said, “This conflict is adding significant strain to a market already plagued by concern, and these worries are not going away,” adding, “If the surge in oil prices continues, inflation metrics will likely feel an immediate impact.”

Amid concerns that the military conflict between Israel and Iran could destabilize oil supply, West Texas Intermediate (WTI) for July delivery soared by more than 7%. Intra-day, the increase exceeded 14%.

By sector, only energy (+1.72%) rose, while all other sectors ended down. Financials fell more than 2%.

Among mega-cap tech stocks with a market cap above $1 trillion, only Tesla rose (+1.94%), while all others declined.

Notably, artificial intelligence (AI) and semiconductor stocks experienced steep declines. The Philadelphia Semiconductor Index plunged 2.61%, and all 30 constituent stocks finished lower.

NVIDIA, Broadcom, and TSMC each fell by around 2%, while Qualcomm, Arm, and AMD also declined by about 2%.

However, even as investor sentiment deteriorated, stocks related to Middle Eastern geopolitical risks enjoyed gains.

U.S. defense contractor Lockheed Martin climbed 3.66%, and both RTX and Northrop Grumman rose by more than 3%.

Energy stocks were also strong, with Chevron rising 0.6% and ExxonMobil jumping 2.18%.

U.S. cloud computing company Oracle surged 7.69% on the day, posting a weekly gain of 14.41%—its best week since 2001.

Meanwhile, the preliminary Consumer Sentiment Index, reflecting U.S. consumer economic confidence, rebounded this month for the first time in six months. According to the University of Michigan, the preliminary June Consumer Sentiment Index was recorded at 60.5, up 8.3 points from the final May figure of 52.2. It also beat the market forecast of 53.5 by a wide margin.

According to CME FedWatch Tool, the probability that the Fed will hold the key interest rate steady at its July meeting is reflected at 77.9%, due to heightened inflation fears amid soaring oil prices.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) rose by 2.80 points (15.54%) to 20.82.

Ko Jeong-sam, Hankyung.com reporter, jsk@hankyung.com