Escalating tensions surrounding Iran intensified a sell-off in U.S. stocks. In the early hours of March 28, Beijing time, the three major U.S. stock indices collectively declined. By the market close, the Dow Jones Industrial Average had plummeted nearly 800 points, a drop of 1.73%. Additionally, the Nasdaq Composite fell over 2%, with major technology stocks experiencing a broad decline. Amazon and Facebook each dropped nearly 4%, while Nvidia and Tesla declined over 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. The main U.S. crude oil futures contract closed up 7.09% at $101.18 per barrel. Rising tensions in the Middle East, particularly concerns over transit through the critical Strait of Hormuz—a vital global oil shipping route—have heightened worries about crude supply, pushing prices higher. Traders fear that a spike in oil prices triggered by an escalation of conflict with Iran could hinder the global economy.
Regarding the latest developments with 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 warning 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 naval pressure in the Persian Gulf and Gulf of Oman, Iran could open a new front at the Bab-el-Mandeb strait, which is controlled by the Houthis.
U.S. markets experienced a broad sell-off on Friday, opening lower and declining 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 tech stocks declined collectively, with Facebook and Amazon down nearly 4%, and Nvidia, Tesla, Microsoft, and Google all falling over 2%. Chip stocks were mostly lower, with the Philadelphia Semiconductor Index down 1.69%. ARM dropped nearly 7%, while GlobalFoundries and Microchip Technology fell over 3%. Marvell Technology, Broadcom, and NXP Semiconductor each declined more than 2%. Bank stocks also fell across the board: Citigroup dropped over 4%, JPMorgan Chase fell over 3%, Morgan Stanley was down nearly 3%, and Goldman Sachs, Bank of America, and Wells Fargo declined more than 2%.
Chinese stocks listed in the U.S. generally fell, with the Nasdaq Golden Dragon China Index declining 1.90%. Among individual stocks, WeRide dropped nearly 9%, Pony.ai fell almost 6%, Kingsoft Cloud declined over 5%, Hesai Technology was down nearly 5%, NIO fell over 4%, XPeng dropped over 3%, and Alibaba and UP Fintech Holding each declined more than 2%.
Survey data released on March 27 by the University of Michigan showed that, influenced by rising fuel prices and financial market volatility, U.S. consumer confidence in March fell sharply by 6%, hitting its lowest level since December 2025. The ongoing conflict involving Iran is exacerbating the situation. The survey revealed that, compared to February data, consumers' 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 rapid deterioration of the Middle East situation, the blockade of the Strait of Hormuz pushing oil prices higher, renewed inflation expectations, and concerns over the Federal Reserve delaying interest rate cuts, market risk aversion intensified, putting pressure on global risk assets. Overnight, international oil prices rose sharply. The main U.S. crude contract settled up 7.09% at $101.18 per barrel, while the main Brent crude contract gained 4.74% to $106.72 per barrel. Soaring oil prices, which boost inflation expectations and push bond yields higher, severely impacted growth stocks this week. Investors are now considering that the Federal Reserve may not be able to cut interest rates this year as previously anticipated.
Gina Martin Adams, Chief Market Strategist at HB Wealth Management, stated, "I think the stock market is starting to show fatigue; hopes for a quick resolution to the war are fading. The most ideal scenario has not materialized." Brian Mulberry, Chief Market Strategist at Zacks Investment Management, said markets are now beginning to price in intermediate and worst-case scenarios. For the stock market, the worst-case scenario would involve oil prices remaining above $100 per barrel until July.
In its latest warning dated 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 industries in the region to immediately leave their workplaces to avoid endangering their lives. The statement indicated that, despite previous warnings from Iran urging relevant parties to refrain from actions against Iranian industrial sites, the U.S. and Israel still carried out multiple strikes on Iranian industrial centers that day. The statement also called for residents within a one-kilometer radius of such facilities to temporarily evacuate their homes during related operations.
According to a CCTV news report, sources within Iran stated that after the U.S. and Israel attacked Iranian steel plants, Iran has designated six steel plants within Israel and related industrial facilities in five regional countries as new targets for retaliatory strikes. Informed sources suggested that Iran's response may not be limited to the regional steel industry and could involve "broader and stronger" measures.
Furthermore, according to Iranian sources on the 27th, Israel and the U.S. attacked Iran's Khondab nuclear facility, which houses a heavy-water reactor. The Deputy Governor for Political-Security Affairs of Iran's Markazi 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 on the Khondab complex resulted in no casualties. It was reported that, due to prior necessary safety measures being taken, 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 a ground operation 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 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, with the duration of closure being indefinite.