400 points after Israel strikes Iran, oil prices surge amid growing Middle East tensions- Dow futures dropped sharply early Friday after Israel launched a wave of airstrikes on Iran, triggering a sudden spike in oil prices and rattling global markets already on edge due to rising geopolitical instability. Futures tied to the Dow Jones Industrial Average fell 423 points, or about 1%, reflecting deep investor concern. S&P 500 futures were down around 0.9%, while Nasdaq 100 futures slipped 1.1% in early premarket trading. The financial tremors followed Israel’s military offensive targeting Iranian infrastructure, prompting Israel’s Defense Minister Israel Katz to declare a special state of emergency. According to NBC News, two U.S. officials confirmed there was no American involvement in the operation.

The attack by Israel pushed financial markets into risk-off mode. Investors rushed to safer assets, and stocks across the board reacted negatively. The Dow, S&P 500, and Nasdaq futures all dropped as fears of wider regional conflict resurfaced. The Dow’s 423-point slide—roughly 1%—was among the most significant recent drops.

Meanwhile, oil prices skyrocketed, with Brent crude futures and West Texas Intermediate (WTI) crude both surging over 8%. WTI crude was approaching $74 a barrel, reflecting fears that escalating conflict could disrupt global oil supply. As investors looked for safer ground, gold prices climbed more than 1%, driven by demand for safe-haven assets. The U.S. dollar also gained strength, buoyed by its traditional role as a stable currency during times of geopolitical tension. The move was described as "predictable" by market analyst Adam Crisafulli from Vital Knowledge, who added that Iran’s degraded military capacity might prevent an immediate or large-scale retaliation.

While tech and growth stocks tumbled, oil and defense stocks surged. Shares of ExxonMobil and Chevron were both up nearly 3% in early trading. Defense contractors also rallied—Lockheed Martin and RTX Corp saw gains of over 4%. These moves reflect investor expectations that rising tensions could increase demand for military equipment and energy resources. Conversely, top tech names like Nvidia and Tesla, which had helped lead the stock market rebound earlier this month, were down sharply in premarket action. The sharp risk-off sentiment sent many investors fleeing from growth-heavy stocks. President Donald Trump, addressing the crisis on his platform Truth Social, urged Iran to de-escalate and enter negotiations. “There has already been great death and destruction, but there is still time to make this slaughter... come to an end,” Trump wrote, adding, “Iran must make a deal, before there is nothing left.” He warned that upcoming attacks could be “even more brutal” and called for diplomacy before it’s “too late.”

The message comes as Trump faces increasing pressure to stabilize the Middle East situation while also balancing domestic political and economic interests heading into summer.

Before Friday's dramatic shift, markets had been on track for a positive week. The S&P 500 was up nearly 0.8% and was less than 2% away from an all-time high. Now, much depends on how the conflict develops and how energy prices influence inflation concerns.

Investors are also watching for the University of Michigan’s preliminary consumer sentiment index for June, due later in the day. The reading could offer insights into how American households are responding to higher fuel prices and geopolitical stress.

That’s the biggest economic question now. If oil stays elevated above $74 a barrel or continues climbing, consumers and businesses will face renewed inflation pressures, which could complicate the Federal Reserve’s monetary policy path. Already, the Fed has signaled a cautious approach to rate cuts this year, and any upward push on energy costs may force officials to keep borrowing rates higher for longer.
Because rising geopolitical tension pushed investors to safer assets, causing stocks to drop.

Oil prices surged more than 8% due to fears of disrupted global supply.