Stocks, bonds and gold slump while Iran war rages
By John Towfighi, CNN
New York (CNN) — US stocks and bonds fell, oil prices rose and gold had its worst week in four decades as the Iran war continues to ripple through financial markets.
The Russell 2000, an index of smaller companies more sensitive to interest rates, fell 2.26% Friday and closed in correction territory, down 10.3% from its January peak. A “correction” is a Wall Street term for when a stock or index falls 10% or more from its most recent peak.
The Dow fell 444 points, or 0.96%. The S&P 500 fell 1.51%, and the tech-heavy Nasdaq slumped 2.01%. Wall Street’s fear gauge, the VIX, surged 11%.
The Nasdaq during trading dipped into correction territory before paring some losses heading into the closing bell. The Nasdaq is down 9.65% from its peak in late October, putting the index on the verge of a correction. The Dow is down roughly 9.2% from its peak on February 10, and the S&P 500 is down 6.77% from its peak in late January.
The S&P and Nasdaq on Friday each closed at their lowest level since September, erasing six months of gains. The Dow closed at its lowest level since October.
The war with Iran is sending energy prices soaring, raising concerns about inflation and complicating the outlook for central banks across the globe. Uncertainty about the duration of the conflict, and the prospect of higher-for-longer interest rates to combat inflation, are dimming the outlook for stocks.
US Treasury yields jumped Friday as investors sold bonds and recalibrated expectations for inflation. The 10-year yield, which influences mortgage rates, jumped to 4.39%, its highest level since July.
“Investors initially thought that the Iran war would be short,” José Torres, senior economist at Interactive Brokers, said in a note. “But as aggressions intensify amid no light at the end of the tunnel, the pain on Wall Street continues, as shareholders and owners of fixed-income assets get battered simultaneously.”
The sell-off in stocks and bonds extended beyond US markets. The UK 10-year bond yield surged above 4.9% on Friday and its highest level since 2008. London’s FTSE 100 stock index fell 1.44%.
US stocks took a step lower Friday afternoon after CBS reported the Trump administration is making preparations for a potential deployment of US troops to Iran. Higher bond yields can also pull investors away from stocks.
Gold slumped 2% Friday, bringing its weekly losses to more than 10% and putting the yellow metal on track for its worst week since 1983.
Brent crude, the global oil benchmark, rose 3.26% Friday to settle at $112.19 per barrel, its highest settle so far during the war and its highest closing price since July 2022. US crude oil rose 2.27% to $98.32 per barrel.
The Dow dropped four weeks in a row, marking its longest streak of consecutive weekly losses in three years. The S&P 500 also dropped four weeks in a row, marking its longest streak of consecutive weekly losses in one year.
“The stock market remains in negative territory for the year, and has made new 2026 lows this week, which suggests that the market may not have yet found its bottom and is still in the process of sorting out and pricing in the duration of the Middle East conflict and oil price outlook,” David Laut, chief investment officer at Kerux Financial, said in an email.
The-CNN-Wire
™ & © 2026 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
