Quick overview
- Dramatic stock market losses occurred after President Trump’s comments on Iran, with the Dow Jones falling over 500 points.
- Trump’s remarks led to a spike in oil prices, pushing Brent crude futures above $78 per barrel.
- U.S. military strikes on Iran followed Trump’s comments, further impacting chip stocks negatively.
- Energy stocks rose amid the escalating conflict, shifting market focus away from semiconductor companies.
Dramatic stock market losses marked Wednesday morning after U.S. President Donald Trump spoke to NATO on Iran, saying “They’re scum.”
The Dow Jones Industrial Average fell more than 500 points on Wednesday, losing 1.%, while the Nasdaq Composite lost 1.1% and the S&P 500 fell 0.8%. The sharp decline was spurred by comments from President Trump this week in Turkey as he said on Iran, “I think it is over. I don’t want to deal with them anymore.”
His comments prompted a spike in oil prices, driving Brent crude futures up by 5.3% and pushing them over $78 per barrel. West Texas Intermediate climbed by 5% as well, trading just below $74 per barrel.
Strikes on Iran Followed by Stock Market Decline
After Trump’s comments, the United States launched a volley of attacks, hitting targets in Iran. The strikes were meant to retaliate for Iran’s own attacks on several commercial ships that passed through the Strait of Hormuz on Tuesday. Military leadership for the United States called the attacks completely necessary.
Chip stocks continued to fall, feeling further selling pressure after the attacks. Super Micro Computer Inc. (SMCI) lost 3.46% and Micron Technology (MU) extended losses to dip 4.71%. Semiconductor stocks performed well at the start of the week but quickly lost momentum amid worries that capex spending was growing out of control and would catch up with company profits the latter half of 2026.
Meanwhile, energy futures rose on the escalating conflict in the Middle East, as expected. Chevron and Exxon Mobil both climbed 3.5%, and ConocoPhillips added 4.9%. The direction of the market has radically changed this week, and the focus is off chip stocks somewhat and placed squarely on energy futures. With the fighting ramping up in the Middle East, we anticipate that the current stock market trends will continue to move in the same direction.
Coming later today is the first Federal Reserve meeting under new Chairman Kevin Warsh. Interest rates will be a key topic of conversation, but with climbing inflation and escalating war tensions, those rates are unlikely to be touched.
Timothy St. John
Financial Writer – European & US Desks
www.fxleaders.com