As Israel's fatal strike against Iran sparks fears about regional wars in the Middle East, US stocks are falling.
The US major stock index fell on Friday, June 13th, as fear of regional wars promoted risk-off sentiment. Dow Jones' industrial average fell 525.80 points (1.22%), with almost all major stocks trading in red. The S&P 500 slipped 0.54%, while the high-tech Nasdaq fell 100 points (0.53%).
Dow Jones Industrial Average Heatmap | Source: Tipranks
The market is rattles off by a potential economic fallout of growing tensions between Israel and Iran. Israel has carried out a series of deadly attacks on Iran's military and nuclear facilities. The Israeli government argued that Iran's nuclear program poses an existential threat and that Iran has vowed to bring about a “legitimate and powerful response.”
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Altcoins hit global tensions hard
Escalating conflicts have led traders to rethink their exposure to high-growth and high-risk assets like tech stocks. In particular, Nvidia dropped by 1.5%, while Apple fell by 1% after attack. At the same time, investors turned to traditional safe havens such as gold and dollars.
As a result, Crypto was one of the asset classes most affected by Middle Eastern tensions. Overall crypto market capitalization fell 2.7%, while Bitcoin (BTC) fell 2.19% to $105,000. Major Altcoins like Ethereum (Eth) and Solana (Sol) were hit even harder, reducing by 7.1% and 7.45% respectively.
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The fear of the war between Iran and Israel contributed to the surge in oil prices. Crude rose 14% at one point to $79 per barrel. Iran is located in the Persian Gulf, a key region of oil production in the world, close to some of the world's largest oil producers.
The rise in oil prices is also being driven by a new fear of inflation. This comes at a time when US tariffs on their major trading partners are expected to add additional inflationary pressures. The growing uncertainty could reduce the likelihood of interest rate reductions due to the Federal Reserve, a negative signal for both the tech and crypto markets.
read more: Bitcoin is on sale after Israel's strike against Iran: Analysts
