Amid escalating concerns over the tense situation in the Middle East, investors have been fleeing from risky assets. On Tuesday (October 1st), all four major indices of the U.S. stock market closed lower, with the VIX panic index surging by 24%.
Iran launched approximately 200 missiles towards Israel on Tuesday (October 1st) in retaliation for Israeli actions against Tehran’s Hezbollah allies, leading to a sudden escalation in the Middle East tension.
Fears of a full-scale war erupting in the Middle East intensified, causing a widespread decline in the U.S. stock market. On Tuesday, the stock market’s fear index, VIX, soared over 15% to reach 19.26.
The Dow Jones Industrial Average fell by 173.18 points or 0.41%, closing at 42,156.97 points. The S&P 500 index dropped by 53.73 points or 0.93%, ending at 5,708.75 points. The tech-heavy Nasdaq index plummeted by 278.81 points or 1.53%, closing at 17,910.36 points. The Philadelphia Semiconductor Index slid by 148.12 points or 2.86%, finishing at 5,024.94 points.
The Nikkei index closed down by 843.21 points or 2.18%, settling at 37,808.76 points. The East stock price index closed down by 38.82 points or 1.44%, reaching 2,651.96 points.
In the European stock market, the three major indices closed with mixed results on Tuesday. The London FTSE 100 index rose by 39.70 points or 0.48%, ending at 8,276.85 points; the Frankfurt DAX index fell by 111.79 points or 0.58%, closing at 19,213.14 points; and the Paris CAC 40 index dropped by 61.68 points or 0.81%, finishing at 7,574.07 points.
Meanwhile, investors flocked to safe-haven assets—gold prices rose, with U.S. gold futures increasing by 1.16% on Tuesday to $2,690.30 per ounce.
In early Asian trading on Wednesday (October 2nd), spot gold experienced narrow fluctuations, trading at $2,658.91 per ounce, holding onto most of the overnight gains. Supported by safe-haven demand, gold prices surged over 1% on Tuesday, reaching a high of $2,673.01 per ounce during trading, closing at $2,663.22 per ounce, up nearly $30 from Monday’s closing price.
Despite the overall market decline, energy company stocks rose by 2.4% alongside the increase in U.S. oil prices. Western Oil Company, ConocoPhillips, Lockheed Martin, Northrop Grumman, and Halliburton all saw their stocks rise by over 3% in the afternoon on Tuesday.
Following reports of the Iranian missile attack on Israel, international oil prices immediately rose. In particular, light crude oil futures for November delivery on the New York Mercantile Exchange settled at $69.83 per barrel, up by 2.44%; while Brent crude oil futures for December delivery closed at $73.56 per barrel in London, reflecting a 2.59% increase.