The stock market experienced a challenging week amid the ongoing war with Iran. The S&P 500 pulled back roughly 7% from its recent high due to fears of an extended war, with the Dow Jones Industrial Average and Nasdaq briefly dipping into correction territory. Reports of additional troop deployments to the Middle East and hesitation from Iranian officials to reopen the critical Strait of Hormuz added to investor concerns.
The S&P 500 closed below its 200-day moving average for the first time since May 2025, causing some analysts to fear increased inflationary pressures. Oil prices have surged approximately 50% since the start of the Iran conflict, which, if sustained, could risk a recession. However, the market remains optimistic, with a quarter of the components of the S&P 500 still trading above their 50-day moving averages.
The main losers this week were several consumer staples companies, including McCormick, General Mills, and Conagra Brands, which saw stocks sharply decline as the war led to consumers increasingly tightening their budget. Moreover, tech stocks and bonds felt the pressure with Nasdaq slumping by 2.01%. Gold had its worst week in four decades due to market uncertainties, while oil prices climbed.
On the gainer side, energy stocks including APA, Occidental Petroleum, Ciena, and Devon Energy were seen as overbought, mostly driven up by the surge in oil prices due to the ongoing conflict in the Middle East. However, the overbought signal serves as a potential warning for investors who may consider reducing their positions in these stocks given their current high valuations.
Ahead, the outlook for the stock market remains uncertain, and largely depends on how long the Middle East conflict continues and its potential impact on inflation and growth.
Gold experienced a major drop this week of nearly 10%, representing the worst weekly loss since September 2011. Futures of the metal decreased by 0.7% to $4,574.90 an ounce, a significant drop after earlier gains. This plunge is largely attributed to the ongoing economic implications of the U.S.-Iran War. Despite this, gold is still up over 5% in 2026, due to the bullish run prior to the Persian Gulf conflict.
On the other hand, silver also experienced losses this week, dropping more than 2% to its lowest level since December at $69.66. This represents silver’s third consecutive losing week, marking a 14% decline. The losses for precious metals deepened on Thursday due to rising concerns over the economic fallout from the Iran war.
Oil market volatility resulting from the U.S.-Israel war with Iran has been affecting global investor sentiment. Oil prices reached a high of $112 in Friday’s session. Both the Dow Jones Industrial Average and the Nasdaq Composite edged near a 10% decline from their recent highs in what Wall Street defines as a correction.
The extreme volatility in gold and silver over the past several weeks is the result of momentum trades being unwound, as explained by Arthur Parish, a metals and mining equity analyst. However, he noted that this might be necessary for gold to rise again.
Toni Meadows, head of investment at BRI Wealth Management, said that gold and silver prices are dependent on daily demand and “fear mark-up.” He doesn’t view gold as a hedge to every move in risk assets but believes it is driven by longer-term trends as opposed to short-term fear trading.
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