Brent crude surged 3.1% to reach $116.72, hitting a five-month peak after Tehran threatened retaliatory strikes against U.S. and Israeli assets. This geopolitical escalation rattled equity markets, fueling a flight to safety as investors abandoned risk-heavy positions in favor of stable consumer staples and utilities.
The Dow Jones Industrial Average bore the brunt of the session, sliding 652.82 points, or 1.23%, to close at 52,215.16. The S&P 500 dipped 0.52% to 7,623.68, while the tech-heavy Nasdaq Composite proved more resilient, shedding only 0.21% to 25,955.34 as the recent selloff in artificial intelligence stocks began to lose momentum.
Treasury yields staged a recovery following their sharpest single-day decline in over three years. The 10-year note saw the most significant movement, climbing 0.110 percentage points to 4.987%. Meanwhile, the two-year yield rose to 4.680% and the 30-year bond settled at 5.314%.
Market participants are aggressively shifting capital into defensive sectors. The consumer staples category has surged 9.6% this month, tracking toward its strongest performance in 26 years. Utilities and health care stocks also outperformed the broader S&P 500, reflecting deep-seated anxiety over potential disruptions to Persian Gulf infrastructure, including pipelines and regional airports.
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