Wall Street experienced a turbulent session on Monday, March 2, 2026, as the S&P 500 staged a recovery after an initial drop triggered by joint U. S.-Israeli military action against Iran. The index, after falling as much as 1.2%, rebounded to close near flat, up 0.04%. This intraday swing reflected investor uncertainty and a subsequent "buy the dip" mentality, particularly in technology stocks. The Dow Jones Industrial Average closed down 0.2%, while the Nasdaq Composite managed a 0.4% gain.
The military strikes, which resulted in the death of Iranian Supreme Leader Ayatollah Ali Khamenei, escalated geopolitical tensions in the Middle East. Iran retaliated by launching missiles and drones on Israel and other Middle Eastern countries. The conflict immediately impacted energy markets, with oil prices surging over 6% due to concerns about potential disruptions to global petroleum supplies. WTI crude climbed above $71 per barrel, and Brent crude reached $76.76.
The surge in oil prices stoked fears of inflation, leading to a rise in Treasury yields. The 10-year Treasury yield saw its largest single-day gain since June 2025. Analysts warned that a prolonged conflict could significantly disrupt global oil shipments, as approximately 20% of the world's supply passes through the Strait of Hormuz. Some analysts believe the impact could be modest because the U. S. has shifted from being a net importer to a net exporter of oil.
Defense Secretary Pete Hegseth characterized the U. S. operation as a "clear, devastating, and decisive" action aimed at dismantling Iran's offensive military capabilities. However, President Trump indicated the conflict could last for several weeks. Investors will continue monitoring developments in the Middle East, corporate earnings, and upcoming economic data to gauge the market's direction.
