US stock market ends lower as Israel-Iran conflict escalates; Dow Jones, Nasdaq cracks over 1%; defence stocks rally
US stock market ended sharply lower on Friday, led by losses in financials and information technology stocks, after conflict in the Middle East escalated as Iran launched counterstrikes at Israel.
The Dow Jones Industrial Average dropped 1.79% to 42,197.79, while the S&P 500 declined 1.13% to end at 5,976.97. The Nasdaq closed 1.30% lower at 19,406.83.
Ten of the eleven S&P 500 sector indices closed lower, with financials leading the decline, falling 2.06%, followed by a 1.5% drop in the information technology sector. Declining stocks outnumbered advancers on the S&P 500 by a ratio of 6.1 to 1.
For the week, the Dow Jones fell 1.3%, the S&P 500 dipped 0.4% and the Nasdaq lost 0.6%.
Investor sentiment took a hit after multiple explosions were reported over Tel Aviv and Jerusalem, with sirens sounding across Israel following missile launches from Iran. The development followed Israeli strikes on nuclear facilities and missile factories in Iran, marking a sharp escalation in Middle East tensions.
The US dollar index rose about 0.5% to 98.16, while US 10-year Treasury yields rose 5.6 basis points to 4.413%, as markets absorbed a sudden shock to commodity and stock prices.
Meanwhile, crude oil prices jumped 7%, feeding investor worries over a wider disruption in oil supplies.
Nvidia share price declined 2.1%, Apple stock price lost 1.4%, while Visa and Mastercard shares fell more than 4% each. Adobe shares fell 5.3%, Oracle shares jumped 7.7% to a record high,
US defense stocks rallied, with Lockheed Martin, RTX Corporation and Northrop Grumman all gaining over 3%.
Airline stocks fell amid rising fuel costs. Delta Air Lines share price declined 3.8%, United Airlines stock price plunged 4.4% and American Airlines shares dropped 4.9%.
US energy stocks rose, with Exxon share price gaining 2.2% and Diamondback Energy shares rallying 3.7%.
(With inputs from Reuters)
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Body and prisoner returns follow Istanbul talks In other developments, Russia repatriated more bodies of fallen soldiers in line with an agreement reached during peace talks in Istanbul between Russian and Ukrainian delegations, Russian officials said Saturday, cited by Russian state media. The officials said Ukraine did not return any bodies to Russia on Saturday. Ukraine's Coordination Headquarters for the Treatment of Prisoners of War confirmed in a statement that Russia returned 1,200 bodies. The first round of the staggered exchanges took place Monday. The agreement to exchange prisoners of war and the bodies of fallen soldiers was the only tangible outcome of the talks in Istanbul on June 2. Russia says push continues Continuing a renewed battlefield push along eastern and northeastern parts of the more than 1,000-kilometre front line, the Russian Defence Ministry claimed Saturday that its troops captured another village in the Donetsk region, Zelenyi Kut. 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2 hours ago
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Zelenskyy warns oil price surge from Israel-Iran conflict could aid Russia's war chest
A sharp rise in global oil prices following Israeli strikes on Iran will benefit Russia and bolster its military capabilities in the war in Ukraine, Ukrainian President Volodymyr Zelenskyy said Friday in comments that were under embargo until Saturday afternoon. read more Zelensky also hoped the escalation between Israel and Iran would not result in a drop in military aid to Kyiv, according to remarks published on Saturday. "We would like to see aid to Ukraine not decrease because of this," he said. "Last time, this was a factor that slowed down aid to Ukraine." Israel unleashed large-scale attacks on Iran Friday, targeting nuclear and military facilities as well as high-ranking generals and atomic scientists, sparking international calls to restraint as fears of broader conflict grow. Image- AFP Ukrainian President Volodymyr Zelenskyy has warned that the recent spike in global oil prices, triggered by Israeli strikes on Iran, stands to benefit Russia and strengthen its military operations in Ukraine. Addressing the media in Kyiv, Zelenskyy said that the increase in oil prices poses a serious risk to Ukraine's defense capabilities, particularly as Western nations have failed to implement robust price caps on Russian oil exports. His statements were made on Friday but released under embargo until Saturday afternoon. STORY CONTINUES BELOW THIS AD 'The strikes led to a sharp increase in the price of oil, which is negative for us,' Zelenskyy said. 'The Russians are getting stronger due to greater income from oil exports.' Global oil prices rose as much as 7% after Israel and Iran exchanged attacks over the past 48 hours, raising concerns that further escalation in the region could disrupt oil exports from the Middle East. Zelenskyy said he planned to raise the issue in an upcoming conversation with US President Donald Trump and also expressed concern that US military aid could be diverted away from Ukraine toward Israel during renewed tensions in the West Asia. 'In the near future, I will be in contact with the American side, I think with the president, and we will raise this issue,' he said. 'We would like aid to Ukraine not to decrease because of this,' he said. 'Last time, this was a factor that slowed down aid to Ukraine.' Zelensky also hoped the escalation between Israel and Iran would not result in a drop in military aid to Kyiv, according to remarks published on Saturday. STORY CONTINUES BELOW THIS AD 'We would like to see aid to Ukraine not decrease because of this,' he said. 'Last time, this was a factor that slowed down aid to Ukraine.' Israel unleashed large-scale attacks on Iran Friday, targeting nuclear and military facilities as well as high-ranking generals and atomic scientists, sparking international calls to restraint as fears of broader conflict grow. Ukraine's military needs have been sidelined by the United States in favor of supporting Israel, Zelenskyy said, citing a shipment of 20,000 interceptor missiles, designed to counter Iran-made Shahed drones, that had been intended for Ukraine but were redirected to Israel. 'And for us it was a blow,' he said. 'When you face 300 to 400 drones a day, most are shot down or go off course, but some get through. We were counting on those missiles.' An air defense system, Barak-8, promised to Ukraine by Israeli President Benjamin Netanyahu was sent to the U.S. for repairs but never delivered to Ukraine, Zelenskyy said. STORY CONTINUES BELOW THIS AD The Ukrainian president conceded that momentum for the Coalition of the Willing, a group of 31 countries which have pledged to strengthen support for Ukraine against Russian aggression, has slowed because of U.S. ambivalence over providing a backstop. 'This situation has shown that Europe has not yet decided for itself that it will be with Ukraine completely if America is not there,' he said. The offer of a foreign troop 'reassurance force' pledged by the Coalition of the Willing was still on the table 'but they need a backstop, as they say, from America,' Zelenskyy said. 'This means that suddenly, if something happens, America will be with them and with Ukraine.' The Ukrainian president also said the presence of foreign contingents in Ukraine would act as a security guarantee and allow Kyiv to make territorial compromises, which is the first time he has articulated a link between the reassurance force and concessions Kyiv is willing to make in negotiations with Russia. STORY CONTINUES BELOW THIS AD 'It is simply that their presence gives us the opportunity to compromise, when we can say that today our state does not have the strength to take our territories within the borders of 1991,' he said. But Europe and Ukraine are still waiting on strong signals from Trump. Without crushing US sanctions against Russia, 'I will tell you frankly, it will be very difficult for us,' Zelenskyy said, adding that it would then fall on Europe to step up military aid to Ukraine. With inputs from agencies
