S&P 500 and Nasdaq: Tech Stocks Drop—Nvidia, Apple Down; Oil Powers Exxon Higher

Dow Drops Over 400 Midday as Israel Strikes Iran; Oil Surges, Tech and Financials Slide

Stocks fell sharply at midday Friday after Israel launched airstrikes on Iran, stoking geopolitical risks and fueling a spike in oil prices. The Dow Jones Industrial Average shed over 400 points, while the S&P 500 and Nasdaq posted smaller declines of 0.3% and 0.4%, respectively. The biggest market movers were energy and defense names, while tech and financials led the downside.

Energy Sector Pops as Crude Jumps 6% on Middle East Conflict

The energy sector was the top gainer by far, up 1.14% midday, as Brent and WTI crude each surged about 6% on fears of supply disruptions from the oil-rich Middle East. WTI nearly touched $74 a barrel.

Major oil stocks like Exxon and Chevron rose over 1%, while Halliburton spiked more than 4%. The energy rally marks a notable pivot from the recent rate-driven pullback and positions the sector as a safe-haven trade in a risk-off environment.

Which Sectors Are Getting Hit the Hardest from the Oil Spike?

Travel-related sectors were under pressure. Airlines dropped sharply on expectations of higher jet fuel costs—American and United Airlines each lost 4%, while Delta fell 3%.

Cruise lines and hotel stocks also weakened, as investors priced in softer travel demand. Carnival fell 4%, Royal Caribbean and Norwegian lost about 2%, and hotel chains Marriott and Hilton were down about 1%.

Why Are Tech and Financials Underperforming?

Technology was the worst-performing sector midday, down 0.83%, with the Nasdaq sliding as traders trimmed exposure to growth stocks. Nvidia and other AI leaders sold off following recent gains.

Financials also dropped 1.46%, with rate volatility and risk aversion weighing on banks and credit names.

Consumer staples saw a 0.7% pullback, and real estate and utilities were both down around 0.9% and 0.5%, respectively.

What Are Traders Watching Next for Direction?

With markets on edge, attention remains fixed on further geopolitical developments. Traders are also eyeing energy prices for inflation implications. A sustained rally in crude could reignite broader concerns over Fed policy tightening.

Meanwhile, the University of Michigan consumer sentiment index jumped to 60.5 in June—well above estimates—offering a silver lining. Still, unless tensions de-escalate, the current safe-haven rotation into energy, defense, and gold is likely to persist. Traders will be closely monitoring comments from the Federal Reserve and further oil price action in the coming days.

More Information in our Economic Calendar.