Global stocks fell off a cliff in early Friday trading after Israel struck targets in Iran, killing Iranian military leaders and targeting the country’s main nuclear enrichment facility.
The Dow Jones Industrial Average of big U.S. companies was down more than 600 points, or 1.4 percent, as of 10 a.m. EDT on Friday.
The S&P 500 index was down nearly 1 percent, and the tech-heavy Nasdaq Composite was down 0.9 percent.
International stocks also tanked, with the German DAX falling by 280 points, or 1.18 percent, and major Chinese and Japanese indices also posting losses.
Oil prices have spiked at the prospect of a broader regional conflict prompted by the Israeli strikes.
West Texas Intermediate crude oil was up 6.7 percent in Friday trading, above $72.50 a barrel, and Brent crude was up more than 5 percent, above $70 a barrel.
The move in Brent is one of the largest on record. Analysts for Deutsche Bank clocked it as the twelfth largest daily spike and the biggest since Russia’s invasion of Ukraine in 2022.
Oil prices had been trending down during President Trump’s trade war as higher tariff levels took the steam out of future global trade flows and international orders and shipments were scaled back.
Higher energy prices could factor quickly into higher inflation in the economy. While tariffs can take months to factor into price increases as companies work through already purchased inventories, increased shipping costs can translate to prices more rapidly.
“The recent good performance on inflation will be at risk from this and from the full impact of tariffs as they filter into the data,” analysts for Deutsche Bank wrote in a Friday analysis.
While Israel carried out direct strikes on Iran in April and October of last year, Friday’s attack is significantly larger in scale and could portend a more intense level of conflict — and one with a nuclear dimension, as Israel struck Iran’s main uranium enrichment facility at Natanz.
“[Israeli air force] fighter jets … struck the Iranian regime’s uranium enrichment site in the Natanz area overnight. This is the largest uranium enrichment site in Iran,” Israel’s military wrote in a social media post.
Iranian state media, citing a security source, reported that “Iran is preparing a ‘decisive response’” to the strikes.
