US stock markets experienced a sharp downturn on Friday, closing the trading day significantly lower, as geopolitical tensions escalated following Israel's airstrikes on Iranian nuclear and military facilities and subsequent Iranian retaliatory missile strikes. The Dow Jones Industrial Average plummeted by approximately 770 points, or 1.8%, while the S&P 500 and Nasdaq also closed near their session lows, down 1.1% and 1.3% respectively. This single day's decline dragged all three major market indexes to close the week lower, with the Dow falling 1.3%, the S&P 500 dipping 0.4%, and the Nasdaq losing 0.6%.

The market's reaction was immediate and pronounced across various sectors. Energy was the sole sector to close in the green on Friday, driven by surging crude oil prices. Over the week, a few more sectors, including healthcare, utilities, and real estate, remained in positive territory or were largely unchanged. However, financials and information technology sectors took the biggest hit, declining by 2.06% and 1.5% respectively on Friday, with financials down two and a half percent for the week. Industrials, despite being the best-performing sector earlier in the year, were also down 1.6%. Declining stocks heavily outnumbered advancers on the S&P 500 by a ratio of 6.1 to 1.

Individual stock performances reflected this broader trend. Among the Magnificent 7, most stocks were down, with the notable exception of Tesla, which gained 2%, and Palantir, up 1.5%. Johnson & Johnson and Chevron were the only two stocks in the Dow to close in the green. Conversely, airline stocks such as Delta Air Lines, United Airlines, and American Airlines saw significant declines (3.8% to 4.9%) due to rising fuel costs and waning travel interest. Major tech companies like Nvidia and Apple also saw their share prices fall by 2.1% and 1.4% respectively, while Visa and Mastercard shares dropped over 4% each. Defense stocks, however, rallied, with Lockheed Martin, RTX Corporation, and Northrop Grumman all gaining over 3%. Oracle shares jumped 7.7% to a record high, while regional banks and gambling stocks took a notable tumble.

A major catalyst for the market's volatility was the dramatic surge in commodity prices, particularly crude oil. Brent crude futures settled up 7.02% at $74.23 a barrel, after soaring over 13% earlier in the session to an intraday high of $78.50, its strongest level since January 27. US West Texas Intermediate (WTI) crude finished 7.62% higher at $72.98 a barrel, having jumped over 14% to its highest since January 21. Both benchmarks recorded their largest intraday moves since 2022, when Russia's invasion of Ukraine caused a similar spike in energy prices. This increase was fueled by investor worries about widespread disruption to oil exports from the Middle East, especially through the vital Strait of Hormuz, a narrow passage through which about a fifth of the world’s total oil consumption (18 to 19 million barrels per day) passes. Despite reports from Iran's National Iranian Oil Refining and Distribution Company that its oil refining and storage facilities, including Kharg Island (responsible for 90% of Iran's crude exports), remained undamaged and operational, concerns persisted. Analysts also noted that OPEC and its allies, including Russia, possess spare capacity roughly equivalent to Iran's 3.3 million barrels per day production (over 2 million bpd exported), which could potentially offset some supply disruptions. However, the possibility of an