Wall Street’s major indexes all closed in the red on June 3, with the Dow Jones Industrial Average dropping roughly 1.2%, the S&P 500 falling 0.74%, and the Nasdaq Composite sliding 0.89%. The culprit: escalating military tensions between the US and Iran that sent oil prices surging and investors scrambling for the exits.
Bitcoin didn’t escape the carnage. The largest cryptocurrency by market cap fell to around $73,000, while the total crypto market capitalization shed about 2.8% in 24 hours to settle near $2.46 trillion.
Oil, war, and the sell-off playbook
Rising tensions in the Strait of Hormuz, through which roughly one-fifth of the global oil supply passes, provided the catalyst for the sell-off. Renewed airstrikes and military engagements between the US and Iran pushed crude prices sharply higher. President Trump described ceasefire efforts as being on “massive life support.”
The sectors that took the hardest hits were financials and tech, both of which had been leading the market higher in recent months. Higher oil prices feed directly into inflation expectations, and inflation expectations feed directly into interest rate fears.
