Wall Street declines following Iran’s attack on Israel

Contrary to the broader market trend, defense stocks recorded gains, along with those in the energy sector.

Wall Street’s three main indexes ended Tuesday’s trading session with losses. U.S. stocks fell as the market responded with concern to news of escalating geopolitical tensions in the Middle East.

The Dow Jones Industrial Average, which consists of 30 major companies, fell 0.41% to 42,156.97 points, while the S&P 500, comprising 500 stocks, dropped 0.93% to 5,708.75 points. The Nasdaq Composite decreased 1.53% to 17,910.36 points.

During the trading session, reports confirmed that Iran launched missile attacks on several locations in Israel, in response to actions by Tehran that led to the killing of the leader of Hezbollah, a terrorist organization backed by the Iranian government.

Following the attack ordered by Iran’s Supreme Leader Ayatollah Ali Hosseini Khamenei, President Joe Biden instructed the U.S. military to assist in defending Israel and intercept Iranian missiles, warning that the attack could have severe consequences.

Nearly all sectors of the S&P 500 ended the session in the red, though energy companies advanced, driven by a surge in oil prices. Within the Dow Jones, Intel (-3.28%) led the decline.

Like Intel, other chipmakers also suffered sharp declines, with AI giant Nvidia (-3.68%) notably among the worst performers. The Philadelphia Semiconductor Index dropped 2.89%.

Contrary to the overall market trend, defense stocks advanced, including Northrop Grumman and Lockheed Martin, pushing the S&P 500 Aerospace & Defense Index to a record high. Utility stocks also saw gains.