DOW plummets 1,000 points as markets react to war on Iran

Within a half hour of markets opening on March 3, the Dow Jones Industrial Average had dropped 1,048 points, or 2.1%. The S&P dropped 2% when markets opened, and the Nasdaq had sunk 2.1% as well. On March 2, markets opened to losses across the board, but the US economy managed to recover, and the DOW, S&P, and Nasdaq all finished with slight gains. Global markets have fared worse, with Korea’s Kospi stock index plunging 7.2%, and Japan’s Nikkei 225 dropping 3.1%. Countries that rely on energy from the United Arab Emirates and Kuwait have seen markets fall more severely.

When markets opened on March 2, the first day after the US and Israel struck Iran, oil prices rose but stayed comfortably below the ‘panic line’ of $100USD per barrel. On March 3, prices got closer to that line. Brent crude, the international standard for oil prices, rose to $83.58, while a barrel of benchmark U.S. crude rose to $76.64. The largest factor in the rising price of crude is Iran’s strikes on Saudi Arabia, and with Iran striking the US embassy in Riyadh on March 2, the stable energy hub is being threatened. Americans are paying for the rise of crude at the pumps, with gas prices rising 11 cents overnight on March 2. Experts also worry about the safety of the Strait of Hormuz, a narrow strait off the coast of Iran that transports nearly a fifth of all the world’s oil.

Wall Street saw very few winners on March 3, but among the short list was US grocer Target, which rose 3.3% after surprising fourth-quarter profits. Yields on US Treasury bonds continue to worry experts as inflation rises, though. The yield on the 10-year Treasury jumped to 4.09% from 4.05 per cent late March 2, and from just 3.97 per cent on February 27, before the war on Iran. Higher Treasury yields mean more expensive loans for both US consumers and businesses. The rise will impact loans across all sectors, from mortgages to bond insurance. When Treasury yields rise, it also undercuts the price of gold, which fell a shocking 4.9% when markets opened on March 3. Gold had been experiencing a consistent run, retaining value above $ 5,300 USD, but the price fell to $5,053.30 on March 3.  

With inflation rising at a concerning rate, the hike could end up hamstringing the Federal Reserve, preventing it from cutting interest rates like Donald Trump promised. The Federal Reserve has managed to cut interest rates marginally several times in 2025, and had indicated more cuts were to come in 2026, but with inflation and Treasury yields rising, cuts could worsen inflation even more. Instead of projecting spring cuts, financial experts are now pushing expectations back until summertime. Trump wants the Federal Reserve to cut interest rates anyway, but the Fed is stalling, not wanting to risk hurting the economy any more than Trump has already. It’s expected that, at the very least, rates will remain where they are until Trump’s war on Iran has ended.

On February 28, 2026, the US government and Israel undertook a joint operation in Iran, with the US subsequently declaring it was at war with the country. The attacks triggered retaliatory strikes from Iran, targeting US and Israeli military bases across the Middle East. According to Donald Trump, there is no timeline for this war, and the US will continue its operations in the country until it sees a significant regime change, as well as an end to Iran’s supposed nuclear program.

US and Israeli strikes killed Iran’s Supreme Leader, Ali Khamenei, on Day One of the war. Khamenei has been using deadly violence against civilian protesters in Tehran, and his killing has been the only positive piece of Donald Trump’s illegal intervention. Much like Maduro in Venezuela, Ali Khamenei was a vicious and unpopular leader, with the majority of the country wanting him ousted.

According to Trump, his war on Iran has no timeline, and the US will continue to strike the nation until it sees regime change, the end of Iran’s nuclear program, and is certain that Iran will no longer pose an ‘immediate threat’. Iran has been in turmoil for the better part of a year, with civilians protesting against the country’s administration, and the administration responding with violence against civilians.