U.S. Stocks Split Amid Middle East Tensions
The Dow Jones Industrial Average bore the brunt of the selloff, shedding 73.14 points, or 0.15%, to settle at 48,904.78. Meanwhile, tech-heavy Nasdaq clawed higher by 80.65 points, or 0.36%, closing at 22,748.86, and the S&P 500 edged up a modest 2.74 points, or 0.040%, to 6,881.62.
Market anxiety was plainly visible in the Volatility Index (VIX) — widely tracked as Wall Street's "fear index" — which surged 7.96% to 21.44, signaling deepening investor unease.
The turbulence followed coordinated U.S.-Israeli airstrikes on Iran launched Saturday, which reportedly killed several senior Iranian officials, among them Supreme Leader Ayatollah Ali Khamenei. Tehran responded swiftly, launching drone and missile salvos targeting Israel and regional installations housing U.S. military personnel, sharpening an already volatile geopolitical flashpoint.
Speaking at a White House ceremony Monday, President Donald Trump indicated that Operation Epic Fury — the designation given to the ongoing U.S. military campaign initiated Saturday — could extend well beyond its initial timeline. "We projected four to five weeks, but we have capability to go far longer than that. We'll do it," he said. Trump added the operation is progressing "ahead of schedule" while declining to elaborate further.
Airline stocks bore heavy losses as carriers moved to suspend service to the affected region. Shares of Delta tumbled 2.2%, United Airlines retreated 2.9%, and American Airlines suffered the steepest drop among the group, falling 4.2%.
Defense contractors, by contrast, emerged as clear beneficiaries of the conflict. Lockheed Martin surged 3.3%, RTX advanced 4.7%, and Northrop Grumman led the sector with a 6% climb as investors rotated aggressively into defense exposure.
Energy markets also caught a tailwind on supply-disruption fears. ExxonMobil gained 1.1% and Chevron jumped 1.5%, both buoyed by expectations of constrained global oil flows stemming from the regional crisis. Travel and hospitality-linked stocks moved in the opposite direction, weighed down by uncertainty over the conflict's reach and duration.
Nvidia stood out as a bright spot, advancing 2.9% after unveiling a $4 billion strategic investment in two U.S. photonics companies — Lumentum and Coherent — a move aimed at fortifying its R&D capabilities and securing the supply chain infrastructure required for its next generation of AI data-center buildout.
On the legal front, a federal appeals court Monday refused to halt lawsuits seeking refunds for tariffs the Supreme Court ruled last month were unlawfully imposed by Trump. The administration had petitioned Friday for a 90-day delay in executing any mandate, but the Court of Appeals for the Federal Circuit rejected that request outright, allowing proceedings to advance at the U.S. Court of International Trade.
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