The three major New York stock indexes opened lower across the board amid escalating geopolitical tensions triggered by U.S. and Israeli airstrikes on Iran.
At 10:10 a.m. on the 3rd (local time) at the New York Stock Exchange, the Dow Jones Industrial Average fell 1,139.64 points, or 2.33%, to 47,765.14 from the previous close. The Standard & Poor's (S&P) 500 dropped 142.99 points, or 2.08%, to 6,738.63, and the Nasdaq composite fell 479.51 points, or 2.11%, to 22,269.35.
As a full-scale war posture between the United States and Iran continued after the weekend, Iran's military formalized a blockade of the Strait of Hormuz. Ibrahim Jabari, an adviser to the commander of the Islamic Revolutionary Guard Corps (IRGC), warned that ships passing through the Strait of Hormuz could be attacked.
The Strait of Hormuz is a key passage through which about 20% of the world's crude oil shipments pass. Iraqi officials said that if tanker operations are disrupted, a production cut of more than 3 million Barrel per day within days could be unavoidable.
Fears of a blockade sent international oil prices soaring and raised the possibility of a prolonged war, rapidly dampening investor sentiment. President Donald Trump suggested in a Daily Mail interview on the 1st that "it was originally a four-week process," indicating airstrikes could continue for the next four weeks. He also claimed on Truth Social that Iran's air defenses, air force, navy and leadership were hit, saying, "Iran wants to talk, but it's too late."
Adam Crisafulli, founder of Vital Knowledge, said, "Initially, the market digested Middle East risks relatively calmly, but after the removal of Iran's leadership, concerns grew that prolonged retaliation could follow, expanding investor anxiety," and noted that "rising energy prices, such as European gas, are putting upward pressure on global borrowing expense."
All 11 S&P 500 sectors fell on the day. Still, performance diverged by stock. Pinterest rose 6.27% on news that activist fund Elliott Management bought a $1 billion equity stake. Best Buy climbed 6.72% as annual sales and fourth-quarter adjusted earnings per share (EPS) beat expectations, even though quarterly sales missed estimates. Target also gained 3.67% after fourth-quarter adjusted EPS came in at $2.44, topping the $2.16 forecast.
European stocks also weakened in tandem. The Euro Stoxx 50 fell 3.73% to 5,763.65, while Britain's FTSE 100 and France's CAC 40 fell 3.19% and 3.53%, respectively. Germany's DAX also dropped 3.95%.
International oil prices are surging. At the same time, West Texas Intermediate (WTI) for April 2026 delivery, the front-month contract, rose 7.58% from the previous close to $76.63 per Barrel in transaction.