Key Takeaways
- Markets plunged following Trump’s national address that provided no roadmap for ending the US-Israel conflict with Iran
- Nasdaq shed 1.7% while the S&P 500 declined 1.2% in Thursday trading
- WTI crude experienced a massive 13% spike, climbing above $113 per barrel in its strongest daily performance since May 2020
- Cryptocurrency markets including Bitcoin tumbled in tandem with equities
- Investor anxiety spiked as the VIX fear gauge climbed to 27.66
Wall Street had anticipated that President Trump’s Wednesday evening national address would chart a clear course toward de-escalating the US-Israeli military campaign against Iran. Those expectations were thoroughly dashed.
Equity markets experienced substantial losses Thursday morning following the president’s remarks, which failed to provide the reassurance investors had been seeking. The Dow Jones Industrial Average plummeted over 600 points, representing approximately a 1.3% decline. The S&P 500 slid 1.2% while the Nasdaq Composite tumbled nearly 2%.
Energy markets told a dramatically different story. West Texas Intermediate crude skyrocketed 13%, breaking above the $113 per barrel threshold. This marked the commodity’s most significant single-day percentage surge since May 5, 2020. Brent crude climbed 8%, pushing past $109 per barrel.
Since hostilities commenced in late February, Brent crude has surged approximately 50%. While a temporary decline earlier this week had offered some optimism to traders, Thursday’s presidential address swiftly extinguished that sentiment.
In his address, Trump declared his intention to “hit Iran hard” and “send them back to the Stone Age.” The president indicated that US military operations would intensify before any withdrawal, which he projected would occur within two to three weeks. Financial markets had been anticipating a more immediate resolution.
Paul Hickey, co-founder of Bespoke Investment Group, captured the market’s disappointment succinctly. “Leading up to last night’s address, there was some optimism that he would lay out a path of ending the hostilities,” he said. “We got neither.”
The Strait of Hormuz continues to serve as a critical focal point. This vital corridor for international oil transportation has remained under intense scrutiny since the conflict’s outbreak.
Technology Sector and Digital Assets Take Heavy Losses
Semiconductor stocks bore the brunt of the selloff. Both Nvidia and Broadcom experienced significant declines as the technology sector broadly retreated. Memory chip manufacturers and other growth-oriented equities that had rallied Tuesday and Wednesday on optimism about conflict resolution surrendered those gains.
Bitcoin declined in lockstep with other speculative assets. Digital currency markets have been responding to the same geopolitical volatility that has pressured stock indexes throughout recent weeks.
The CBOE Volatility Index, commonly referred to as the VIX, surged 3.12 points to reach 27.66. This elevation signals heightened apprehension and uncertainty among market participants in the immediate term.
David Rosenberg of Rosenberg Research observed that Thursday’s market rout coincided with the one-year anniversary of President Trump’s “Liberation Day” tariff proclamations, which similarly disturbed financial markets.
“Hopes for a quick wind-down of the Iran war faded,” Rosenberg wrote. “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 rose to 4.35%. Surging energy prices have rekindled anxieties about stagflation—a economic scenario characterized by simultaneous inflation acceleration and growth deceleration.
Rosenberg further 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 represented the final trading day of a week abbreviated by the holiday calendar. Markets will remain shuttered on Good Friday. Market participants will be scrutinizing the March employment report, scheduled for Friday release, for additional insights into the resilience of the US economy.
Weekly unemployment claims figures published Thursday morning revealed an unanticipated decline, indicating that the labor market has maintained its stability despite the continuing international conflict.
