Escalating tensions in Iran intensified a sell-off in U.S. stocks. In early trading hours on March 28, Beijing time, the three major U.S. stock indices fell collectively. By the close, the Dow Jones Industrial Average had dropped nearly 800 points, a decline of 1.73%. Additionally, the Nasdaq fell over 2%, with major technology stocks experiencing significant declines. Amazon and Facebook each dropped nearly 4%, while Nvidia and Tesla fell more than 2%. The Dow has now fallen more than 10% from its February 10 high, confirming it has entered a correction phase.
International oil prices surged significantly, with the main U.S. crude oil contract closing up 7.09% at $101.18 per barrel. Heightened geopolitical tensions in the Middle East and disruptions to transit through the Strait of Hormuz, a critical global oil shipping chokepoint, have exacerbated concerns about crude supply, driving prices higher. Traders worry that an oil price spike triggered by an escalation of conflict with Iran could weigh on the global economy.
Regarding the latest developments in Iran, the Islamic Revolutionary Guard Corps issued a statement on the 27th, warning personnel associated with American and Israeli industrial enterprises in the Middle East to evacuate promptly. This follows multiple attacks by the U.S. and Israel on Iranian industrial facilities, to which Iran has decided to retaliate.
On the same day, Yemen's Houthi group stated that it would take action if the situation with Iran continues to escalate. Previously, an Iranian military source indicated that if adversaries attempt a ground operation against Iranian islands or mainland, or exert pressure on Iran via naval actions in the Persian Gulf and Gulf of Oman, Iran could open a new front in the Mandab Strait, which is under Houthi control.
U.S. stocks fell across the board on Friday, opening lower and continuing to decline throughout the session. At the close, the Dow was down nearly 800 points, or 1.73%; the S&P 500 fell 1.67%, and the Nasdaq dropped 2.15%.
Major technology stocks declined collectively. Facebook and Amazon fell nearly 4%, while Nvidia, Tesla, Microsoft, and Google dropped over 2%. Chip stocks were mostly lower, with the Philadelphia Semiconductor Index down 1.69%. ARM fell nearly 7%, GlobalFoundries and Microchip Technology dropped over 3%, and Marvell Technology, Broadcom, and NXP Semiconductor declined more than 2%.
Banking stocks also fell across the board. Citigroup dropped over 4%, JPMorgan Chase fell more than 3%, Morgan Stanley declined nearly 3%, and Goldman Sachs, Bank of America, and Wells Fargo each fell over 2%.
U.S.-listed Chinese stocks were mostly lower, with the Nasdaq Golden Dragon China Index down 1.90%. Among individual stocks, WeRide fell nearly 9%, Pony.ai dropped almost 6%, Kingsoft Cloud declined over 5%, Hesai Technology fell nearly 5%, NIO was down over 4%, XPeng dropped more than 3%, and Alibaba and UP Fintech Holding each fell over 2%.
Survey data released on March 27 by the University of Michigan showed that, affected by rising fuel prices and financial market volatility, the U.S. Consumer Sentiment Index fell sharply by 6% in March, reaching its lowest level since December 2025. The ongoing conflict involving Iran is worsening the situation.
The survey indicated that compared to February data, consumer expectations for fuel prices over the next year surged approximately fivefold, reaching the highest level since June 2022. Conversely, expectations for personal financial situations over the next year fell by 10%. Forty-seven percent of consumers stated that rising prices are placing a significant burden on their personal finances.
Driven by the sharp deterioration in the Middle East situation, the blockade of the Strait of Hormuz pushing oil prices higher, renewed inflation expectations, and concerns about delayed interest rate cuts by the Federal Reserve, market risk aversion intensified, putting pressure on global risk assets.
Overnight, international oil prices rose sharply. The main U.S. crude contract closed up 7.09% at $101.18 per barrel, while the main Brent crude contract gained 4.74% to $106.72 per barrel.
Spiking oil prices, which raise inflation expectations, and rising bond yields hit growth stocks hard this week. Investors now believe the Federal Reserve will not be able to cut interest rates this year as previously expected.
"I think the stock market is starting to show fatigue, and hopes for a quick resolution to the war are fading," said Gina Martin Adams, Chief Market Strategist at HB Wealth Management.
"The most ideal scenario has not materialized," stated Brian Mulberry, Chief Market Strategist at Zacks Investment Management, adding that the market is now considering intermediate and worst-case scenarios. For the stock market, the worst-case scenario would be oil prices remaining above $100 per barrel by July.
In its latest warning issued on the 27th, the Islamic Revolutionary Guard Corps stated that, following multiple attacks by the U.S. and Israel on Iranian industrial facilities, Iran has decided to retaliate. It warned personnel associated with American and Israeli industrial enterprises and heavy industry in the region to leave their workplaces immediately to avoid endangering their lives.
The statement said that despite previous warnings from Iran urging relevant parties to refrain from actions against Iranian industrial facilities, the U.S. and Israel still carried out multiple strikes on Iranian industrial centers that day. The statement also called on residents within a one-kilometer radius of such facilities to temporarily evacuate their homes during related operations.
According to reports, information from Iranian sources indicates that after attacks by the U.S. and Israel on an Iranian steel plant, Iran has listed six steel plants within Israel and related industrial facilities in five regional countries as new targets for retaliation. Informed sources suggested that Iran's response may not be limited to the regional steel industry and could involve "broader and stronger" measures.
Additionally, reports on the 27th indicated that Israel and the U.S. attacked Iran's Khondab nuclear facility, which houses a heavy-water reactor.
The Deputy Governor for Political Security in Iran's Central Province stated that the Khondab heavy water complex was attacked by the U.S. and Israel in two phases. The Atomic Energy Organization of Iran also announced that an investigation confirmed the attack caused no casualties. It was reported that due to prior necessary safety measures, there is currently no risk of contamination to the surrounding population.
On March 27, a senior Iranian security official warned that if the U.S. launches ground operations in the Middle East, Iran will take reciprocal action in response. The official stated that once the U.S. enters a ground combat phase, Iran would have the corresponding authority to take equivalent action against the source of the threat. He also emphasized that any military action by "hostile forces" in the Strait of Hormuz could lead to the complete closure of the strait for an indefinite period.
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