On April 1, 2026, the S&P 500 Index dropped by 0.79% while the Dow Jones Industrial Average fell by 0.81%, and the Nasdaq 100 Index declined by 1.12%, marking 6.75-month lows for both the S&P 500 and Nasdaq 100. The decline coincides with rising crude oil prices, which increased by over 3%, amid escalating tensions in the Middle East as Iran and Israel exchanged missile fire on the war’s 27th day. The Pentagon is reportedly considering deploying up to 10,000 additional troops to the region, while Saudi Arabia intercepted missiles aimed at Riyadh.
Consumer sentiment in the U.S. also weakened, with the University of Michigan’s March index revised down to 53.3 from 55.5, below the expected 54.0. Moreover, inflation expectations for the next year rose to 3.8%, exceeding the anticipated 3.6%. Global bond yields surged, with the 10-year U.S. Treasury yield hitting 4.48%, the highest in 8.25 months, impacting market sentiment amid fears that the ongoing conflict will keep energy prices elevated and hamper economic stability.
The International Energy Agency noted that over 40 energy sites in the Middle East have sustained severe damage, which could prolong disruptions to global supply chains. Current projections indicate the war could reduce global oil supply by 8 million barrels per day this month, significantly impacting global energy markets.
