U.S. Stocks fell on Tuesday as investors rushed to price in the growing risk of the ongoing Middle East conflict. The Dow Jones Industrial Average sank more than 700 points, closing down 1.4% after trimming steeper early losses, as fresh US and Israeli airstrikes on Iran rattled global markets.
The sell-off was broad-based. The S&P 500 fell 1.4%, while the tech-heavy Nasdaq Composite slid 1.5% as investors dumped growth names and rotated into defensive plays. Energy prices surged amid fears that key supply routes could remain blocked, amplifying inflation concerns just as markets were attempting to stabilize from Monday’s volatility.
Market Movers:
- Plug Power (PLUG) +25% — Shares soared after the hydrogen fuel cell company reported a narrower-than-expected fourth-quarter loss and improved full-year profitability versus 2025. Management said it expects to reach profitability by the end of 2027, fueling aggressive dip-buying.
- Pinterest (PINS) +7% — The stock jumped after disclosing a $1 billion strategic investment from Elliott Management, with proceeds earmarked for share repurchases. The move signaled confidence in the company’s turnaround and boosted sentiment around shareholder returns.
- Target (TGT) +6% — Shares climbed after the retailer met holiday sales expectations and issued an upbeat full-year outlook under new CEO Michael Fiddelke. Investors welcomed guidance calling for steady sales growth and EPS above consensus estimates.
- MongoDB (MDB) -20% — The cloud database provider plunged after forecasting first-quarter profit below Wall Street expectations, overshadowing otherwise solid results. Slowing growth in its Atlas segment intensified concerns about longer-term demand in the software space.
- Sea Limited (SE) -18% — Shares tumbled after the e-commerce and gaming company missed quarterly earnings estimates. Investors punished the stock amid broader risk-off sentiment hitting international growth names.
- Micron Technology (MU) -6% — The memory chipmaker slid as semiconductor stocks sold off on fears that higher energy prices could pressure operating costs. The move came amid broader weakness across the chip sector.
Oil Shock Ripples Through Markets
Crude prices continued their climb, with West Texas Intermediate and Brent futures up roughly 6% after earlier surging nearly 9%. Iran’s reported targeting of energy infrastructure — including activity near the Strait of Hormuz — heightened fears of prolonged supply disruptions, pushing inflation expectations higher.
The energy spike weighed heavily on growth sectors, particularly technology and semiconductors, which are sensitive to rising input costs and tightening financial conditions. Investors who had grown accustomed to short-lived geopolitical flare-ups are now reassessing whether this conflict could prove more persistent.
Dollar Surge, Metals Reverse
The US dollar index surged toward three-month highs, intensifying pressure on commodities and multinational stocks. While gold initially benefited from haven demand earlier in the week, prices reversed sharply on Tuesday, falling nearly 4% in a notable unwind of safe-haven trades. Silver, platinum, and palladium also posted steep losses, underscoring how rapidly capital rotated amid shifting inflation and risk expectations.
Fed Flags Inflation Uncertainty
New York Fed President John Williams cautioned that higher energy prices could affect the near-term inflation outlook, adding another layer of uncertainty to monetary policy expectations. While he noted that the US economy is less oil-dependent than in past decades, markets remain sensitive to any signs that energy-driven inflation could delay potential rate cuts. With geopolitical risk colliding with central bank uncertainty, volatility appears firmly back on Wall Street’s radar.
Looking Ahead
Investors will continue watching oil markets and Iran’s next move for clues about how long the conflict may last. Any signs of further escalation, particularly involving key shipping routes, could inject fresh turbulence into equities and commodities alike. Beyond geopolitics, earnings remain in focus, with several major retailers and consumer names reporting this week. But for now, energy prices, not corporate profits, are steering the market’s direction.