The Dow Jones Industrial Average (^DJI) fell more than 2.4% on Tuesday as oil continued to surge amid the ongoing war between Iran and the US. The widening conflict stoked worries about a drawn-out regional war, impacting the stock market in the US. The air strikes on Iran and Lebanon intensify a conflict that Wall Street expects to pressure global markets. The focus is now on Tehran’s response after Iran targeted oil infrastructure and other targets across a huge swathe of the region, with at least nine countries reporting hits.
For oil specifically, over the past 24 hours, the national average at the pump rose by $0.10 to nearly $3.11 per gallon, according to AAA data. Meanwhile, gold prices turned lower after a four-day rally, slipping more than 4.4%. The stock market uncertainty has rattled investors, causing most major stocks and indices to drop significantly.
Furthermore, the engine of the AI trade, chip stocks, also got hammered on Tuesday, contributing to the fall of the Dow Jones Industrial Average. The broader industry index (SOXX) opened just under its 50-day moving average — a key technical level that hasn’t been breached since December. NVDA, AMD and TSMC are all down in value, and look to be trending downward for the rest of the week.
On the other end, amid the intensifying Iran-US war, the US dollar has been working its way up the radar. The DXY index has hit a new peak amid the evolving war dynamics, hitting a new value of 99 after stagnating for more than 7 months. This new spike has led the experts to believe that the dollar must be trying hard to regain its lost value, as the pivot towards the safe haven assets continues to diversify in present times.