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News Topical, Digital Desk : US markets witnessed intense volatility on Thursday, with indexes initially recovering after a sharp decline, but the Dow Jones Industrial Average ultimately closed lower. US President Donald Trump's harsh statements regarding the Iran war dashed investor expectations. A sharp rise in crude oil prices further fueled market concerns. However, the S&P 500 and Nasdaq managed to hold on to modest gains.
US stock markets experienced considerable volatility on Thursday. During trading, the market experienced a significant decline, but later recovered. Despite this, the Dow Jones Industrial Average (DJI) closed the day down 61.07 points, or 0.13%, at 46,504.67.
On the other hand, the S&P 500 gained a modest 0.11% to close at 6,582.69. The Nasdaq Composite also rose 0.18% to close at 21,879.18. Tech stocks helped the market somewhat. ...
And then, with Donald Trump's statement, everything changed. He said that the war with Iran would not end immediately, but could continue for the next two to three weeks. Furthermore, he also spoke of "severe punishment" for Tehran. That was the moment when the market's mood completely changed. The Dow began falling rapidly. At one point, it fell by more than 600 points. The S&P 500 and Nasdaq also slipped by 1.5% to 2%. Investors were alarmed—was another major crisis imminent?
But the big twist was yet to come... Around noon, news broke: Iran and Oman were developing a plan to monitor ships passing through the Strait of Hormuz, the route through which a large portion of the world's oil supplies flow. This news brought some relief to the market. Investors thought the situation might improve. Gradually, the market began to rise. The Dow, which had been in the red in the morning, even briefly reached the green.
But this relief was short-lived... because another major story was unfolding: oil prices. US crude oil jumped nearly 11% to $111.54 per barrel. Brent crude also surpassed $109. This surge in oil prices was nothing short of an alarm. Investors were reminded that the threat of inflation could resurface. And as soon as this realization set in, the market failed to recover. By the end of the day, the Dow closed down 61 points. Although the S&P 500 and Nasdaq ended the day with slight gains, the overall narrative suggested that fears hadn't yet subsided. Meanwhile, another piece of news left investors reeling. The Donald Trump administration is preparing to impose a 100% tariff on patented drugs. However, companies like Eli Lilly, Pfizer, and Johnson & Johnson may escape this because they have already struck deals.
Oil prices increased tensions. US crude (WTI) rose nearly 11.4% to $111.54 per barrel, its highest level since June 2022. Brent crude also jumped nearly 7.8% to $109.03. Experts told CNBC International that if oil prices remain high for a prolonged period, it will have a direct impact on inflation and the economy. This means this will remain a major risk for the market in the coming days.
The fear indicator also jumped. The VIX index, known as Wall Street's "fear gauge," rose above 27, indicating high uncertainty in the market. Experts say investors are reacting quickly to every news item—first thinking positively, then retreating when faced with risks.
What's next?
Now investors are keeping an eye on two big things - first, in which direction the Iran-US tension goes and second, where the oil prices stabilize. Apart from this, the jobs data coming on Friday can also decide the direction of the market, even though the market will be closed on that day.
A big impact is possible on the pharma sector as well.
Meanwhile, another big news has come that the Donald Trump administration is preparing to impose 100% tariff on patented medicines and their related ingredients.
However, this tariff will be applicable on those companies which have not signed any agreement with the government. Companies like Eli Lilly, Pfizer and Johnson & Johnson have already signed deals, due to which they can avoid this tariff.
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