Volatile Day on Wall Street as Investors React to Conflict with Iran
It was a volatile day for the stock market as investors reacted to the U.S. involvement in the growing unrest across the Middle East. Here is a look at what unfolded on Wall Street to start the month of March, including the winners and losers of the trading day.
Conflict Between U.S. and Iran Translates to Rocky Day in the Markets
As expected, the U.S. stock market took investors for a wild ride on Monday. Oil prices surged while stocks tanked early in the day. However, two of the three major indexes managed to finish the day ahead after rebounding during the back half of the trading session.
Stocks across the world trended lower for the day, despite results on Wall Street being more positive. The Dow closed the session down by just 73 points for a loss of 0.15%. This stalwart index had slid by almost 600 points earlier in the day before investors were able to work out their jitters.
The news was slightly better for the tech-heavy Nasdaq Composite and the S&P 500. The S&P finished the day up 0.04% for a small gain. Meanwhile, the Nasdaq was able to reverse its early losses by climbing up 0.36%. On an international scale, the European benchmark Stoxx 600 dropped 1.61% while Japan's Nikkei 225 slid 1.35%.
The U.S. stock market typically shrugs off short-term geopolitical tensions. Monday's results suggest that investors do not believe that the conflict between the U.S. and Iran will last for a long period of time.
How high prices soar will drive how much influence the conflict has on the domestic markets. These prices predictably surged when the markets opened on Monday. The markets had already closed on Friday when the first strikes were launched. For now, Wall Street will primarily be watching the possibility of disruptions to oil and gas prices
Global oil prices rose to their highest level in over eight months throughout the day. International benchmark Brent crude climbed 6.7% to hit $77.74 a barrel, marking the highest level this index has seen since the U.S. launched strikes on nuclear facilities in Iran last June.
Similarly, the U.S. oil benchmark, West Texas Intermediate, increased by 6.3% to reach a price of $71.23 per barrel. This was also the highest level for this index since June. The increase did not come as a surprise to investors on Monday morning. Oil prices across the board surged by as much as 13% on Sunday evening, signaling what would happen when the markets opened.
Also on the energy front, diesel prices increased significantly on Monday, hitting the highest level in more than two years. In the U.S., diesel futures were up 12%, equating to the largest single-day jump since 2022.
Natural gas futures climbed by 38% in Europe, while U.S. natural gas futures only inched up by just over 3%. Europe is likely to be more impacted by the disruptions to natural gas production in the Middle East. For instance, Qatar's state-run energy company was forced to stop production of liquefied natural gas following an attack by Iran on its facility in Ras Laffan.
Shares of airline stocks also experienced steep losses on Monday as businesses worry about the uncertainty in the Middle East. Shares of American Airlines (AAL) dropped 4.2%, Delta Air Lines (DAL) sank by 2.2%, and United Airlines (UAL) fell 2.9%. The damage was worse in nearby Europe. Shares of Air France plummted 9.4% while German-based Lufthansa experienced losses of 5.2%.
Where Gains Were Made
As is typical during times of geopolitical unrest and uncertainty in the economy in general, investors keyed in on gold and other safe-haven assets. Gold prices increased 2% to trade at their highest level in a month. While gold is traditionally a haven for investors, its erratic behavior as of late made the markets more skittish in recent weeks.
The U.S. dollar also fared well against major global currencies on Monday as investors from all over the world sought refuge in safe havens. The U.S. dollar index gained 0.95%, easily erasing its losses for 2026 thus far as it hovered at its highest levels in about five weeks. Investors are also hopeful that the dollar will continue to perform well if the Federal Reserve holds interest rates steady in light of the conflict between the U.S. and Iran.
U.S. government bonds slipped on Monday after gaining a bit on Sunday. U.S. Treasury yields dipped on Sunday before rebounding on Monday.
Bitcoin was a big winner on Monday, gaining more than 5% and trading at about $69,120 by the afternoon hours. This was good news for the cryptocurrency due to its rocky performance over the last few months.
Shares of defense stocks also experienced big gains on Monday. This is another typical reaction by investors when global conflict ratchets up. Looking at a few stocks in this industry, Northrop Grumman (NOC) was up 6%, RTX Corporation (RTX) surged 4.7%, and Lockheed Martin (LMT) finished the trading day up 3.37%.
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