Stock Market Today: Geopolitical Tensions Rattle Markets as Oil Surges

Market Overview

The S&P 500 fell 1.55% on Friday as escalating Middle East tensions sent shockwaves through global markets today. The Dow Jones Industrial Average dropped 1.12%, shedding nearly 481 points to close at 42,486.95, while the tech-heavy Nasdaq Composite declined 0.44% to 19,576.47.

Friday’s selloff erased what had been shaping up as a third consecutive week of gains for major indexes. Prior to today’s session, Wall Street’s most observed benchmark was less than 2% away from its all-time high, buoyed by positive economic data and progress in trade negotiations.

Geopolitical Tensions Drive Market Volatility

Markets were rattled after Israel launched widescale strikes against Iran’s nuclear facilities and military commanders early Friday, with Israeli defense minister Israel Katz declaring a “special state of emergency.” Iran described the strikes as a “declaration of war” and launched drone attacks toward Israel in retaliation.

The conflict sent oil prices soaring, with West Texas Intermediate crude futures jumping approximately 8% to around $74 a barrel, the highest level since early April. Brent crude, the international benchmark, similarly surged about 7.4% to $74.46 after hitting an intraday high of $78.50.

“The primary concern is whether the latest developments will affect the Strait of Hormuz,” noted SEB analyst Ole Hvalbye. About 20% of the world’s total oil consumption passes through this strategic waterway.

Goldman Sachs analysts warned that Brent could potentially reach $90 per barrel if the conflict broadens, while JPMorgan had previously forecast prices could spike as high as $120 in a worst-case scenario.

Economic Data and Trade Developments

Before Friday’s geopolitical turmoil, markets today recap had been positive, with investors welcoming progress on trade deals and encouraging inflation data. The Department of Labor reported that the producer price index (PPI) increased just 0.1% in May, below the consensus estimate of 0.2%, suggesting inflation pressures continue to ease.

Initial jobless claims remained flat at 248,000 for the week ended June 7, slightly above the consensus estimate of 246,000. Continuing claims increased to 1.956 million, reaching their highest level since November 2021.

President Trump’s administration had signaled it would be open to extending the current 90-day tariff pause beyond the July 9 deadline for top trading partners if they show “good faith” in negotiations. However, the president also raised concerns about potential unilateral tariffs in comments to reporters.

Earnings Spotlight

Adobe Inc. (ADBE) reported strong quarterly results after Thursday’s market close, delivering record revenue and raising full-year guidance. The software giant posted non-GAAP earnings per share of $5.06, representing 13% year-over-year growth, and achieved Digital Media revenue of $4.35 billion.

Despite the positive results, Adobe shares tumbled 5.31% to $391.73 on Friday amid the broader market selloff. The company highlighted strong adoption of its AI offerings, with management noting that “traffic to the Firefly app grew over 30% quarter over quarter” and its paid subscription base nearly doubled in the same period.

RH (formerly Restoration Hardware) also reported earnings after Thursday’s close, with shares surging 10.19% to $194.90 on Friday despite the negative market sentiment.

Sector Performance and Notable Movers

Energy stocks were among the day’s few winners as oil prices surged. Defense industry firms like Lockheed Martin also traded higher amid the escalating Middle East conflict.

Technology stocks faced pressure, with Nvidia (NVDA) falling 1.19% to $143.27. However, Tesla (TSLA) bucked the trend, rising 3.34% to $329.76. Palantir Technologies (PLTR) gained 3.22% to $139.54.

Among the day’s biggest losers, Visa (V) dropped 4.79% to $353.61, while Archer Aviation (ACHR) plummeted 13.73% to $10.12.

Looking Ahead

Investors will be closely monitoring developments in the Middle East over the weekend, with concerns that further escalation could drive additional market volatility when trading resumes Monday. The University of Michigan’s preliminary June consumer sentiment report, released today, will also be scrutinized for signs of how recent events might impact consumer confidence.

Next week’s earnings calendar includes JD.com (JD) reporting pre-market on Monday, while Oracle (ORCL) is scheduled to release results after the close on Tuesday. Adobe (ADBE) just reported on Thursday, as mentioned in our stock market live coverage.

With oil prices surging and geopolitical tensions rising, markets today face significant uncertainty heading into next week’s trading sessions.