US strikes on Iran push Brent crude up 9%, tech falls
US missile strikes on Iran and the seizure of the Strait of Hormuz triggered a sharp equity sell-off and a surge in oil prices, reviving investor fears of renewed inflation and imminent interest rate hikes.
President Trump ordered missile strikes on Iran and assumed control of the Strait of Hormuz after Iranian forces fired on ships in the Gulf. The US simultaneously restarted a blockade on Iran to guarantee safe passage through the critical waterway.
The escalation sparked an immediate risk-off reaction, with sellers aggressively hitting bids before the opening bell. Chips and technology stocks absorbed the heaviest losses, dragging the Nasdaq down 1.55% to close at 25,873. The S&P 500 fell 0.79% to 7,515, and the Russell 2000 small-cap index dropped 0.86% to 2,952. The legacy Dow Jones Industrial Average proved the most resilient, ending down just 0.26% at 52,498. This divergence highlights how rapidly rising rate expectations disproportionately damage growth stocks compared to legacy industrial names.
For the broader economy, the blockade carries immediate inflationary consequences. The disruption ignited a sharp rally in crude, with Brent surging 9.13% to $82.94 and West Texas Intermediate climbing 8.79% to $77.69. This spike sets the stage for higher gasoline prices just as the summer driving season reaches its midpoint. Natural gas moved inversely, closing down 2.18% at $2.87.
The energy shock forced a broad repricing in the Treasury market, driving yields higher across the entire curve. Surging oil prices revived investor fears of a renewed inflationary surge, shifting focus to the potential for Federal Reserve rate hikes before year-end. Some market participants even suggested a rate hike could arrive this month. The benchmark 10-year note yielded 4.61%, while the 30-year long bond closed at 5.10%.
Individual analyst calls reflected this broader bearish pivot away from tech and digital assets. KeyBanc downgraded Apple to Underweight. Mizuho slashed its price target on Circle Internet Group from $85 to $40, a move that signals ongoing vulnerability in crypto-adjacent valuations.
