Fear and Uncertainty on Wall Street as Israel Attacks Iran

Published: June 13, 2025 by Omor IE

Key Points

Stocks are down due to tensions in the Middle East escalating further, following Israel’s ongoing strikes on Iran.
The tariff expiry for dozens of U.S. trade partners is drawing closer.
Crude oil prices are soaring.

Middle East tensions have been brewing since Wednesday this week, and those fears have been confirmed as Israel has struck Iran. This has sent stocks down worldwide. Investors are now uncertain about what might happen next as they await more strikes or a possible retaliation from Iran.

Israel’s PM Netanyahu has said that these strikes will last for as many days as it takes, potentially escalating the conflict further. This could drag in the U.S. and cause even more economic chaos, since the Strait of Hormuz is one of the most important shipping arteries for crude oil and natural gas.

Here’s a market update as of 10:45 AM (ET) today.

The S&P 500 is down 56.7 points, or 0.94%.
The Nasdaq Composite is down 213.57 points, or 1.09%.
The Dow Jones Industrial Average is down 678.8 points, or 1.58%.

Fears Return Due to Geopolitical Chaos

The stock market had started to slow down in its momentum even before things turned hot in the Middle East. The tariff pause in place for dozens of countries is set to expire next month, and many notable U.S. trade partners aren’t even at the negotiating table yet.

If these countries are unable to quickly negotiate and finalize a deal within a month, they are likely to be hit with double-digit tariffs. This could then raise the input costs for many U.S. businesses and lead to an uptick in inflation.

Still, existing tariffs are already significant, and they haven’t raised inflation.

What Wall Street is worried about the most now is not trade, but rather the situation in the Middle East. A direct U.S.-Iran conflict would be very expensive, both in terms of lives and money, and this would definitely have consequences on the economy.

Relevant Comments

President Donald Trump posted the following on Truth Social:

“I gave Iran chance after chance to make a deal. I told them, in the strongest of words, to ‘just do it,’ but no matter how hard they tried, no matter how close they got, they just couldn’t get it done. I told them it would be much worse than anything they know, anticipated, or were told, that the United States makes the best and most lethal military equipment anywhere in the World, BY FAR, and that Israel has a lot of it, with much more to come – And they know how to use it. Iran must make a deal, before there is nothing left, and save what was once known as the Iranian Empire. No more death, no more destruction, JUST DO IT, BEFORE IT IS TOO LATE”

Per Trump, “the attack would be great for the market, because Iran will not have a nuclear weapon.”

From the Joint Maritime Information Center:

“Events over the past 24 hours have increased the likelihood of regional conflict to significant.”
“The Strait of Hormuz remains open, and commercial traffic continues to flow uninterrupted.”
“There are no indications of an increased threat to the maritime environment.”

Macros

University of Michigan 1-year inflation expectations lowered to 5.1% vs. the forecast of 6.4%.
University of Michigan 5-year inflation expectations unchanged at 4.1%, in line with forecasts.
University of Michigan Sentiment at 60.5 vs. the 53.6 forecast.