Markets in Turmoil: SPY & QQQ Plunge as Israel-Iran Tensions Spike—VIX Rockets 20%

Geopolitical shockwaves hit risk assets as Middle East tensions trigger flight to safety.

Tech-heavy QQQ leads losses—traders dump growth stocks for hard assets.

Volatility explodes: VIX posts biggest single-day jump since 2023 banking crisis.

Wall Street''s ''hedge everything'' mantra looks prescient—for once.

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This morning, President TRUMP said that Israel’s attack on Iran could actually benefit the market.

“I think ultimately, it WOULD be great for the market because Iran will not have a nuclear weapon,” said Trump in an interview with the Wall Street Journal. “It will be great for the market—should be the greatest thing ever for the market. Iran won’t have a nuclear weapon that was a great threat to humanity.” On Truth Social, Trump urged Iran to sign a deal that would end its nuclear program.

Crude oil futures jumped by about 7% today as the conflict threatens disruptions to the Strait of Hormuz, which acts as a passage for nearly 20% of global oil shipments. To increase domestic production, Trump wants U.S. oil refiners to blend an all-time high of 24.02 billion gallons of biofuel into conventional fuels in 2026. Biofuels are an alternative to fossil fuels that are created from organic matter, like algae and crops.

Meanwhile, consumer sentiment is on the rise, erasing six months of consecutive drops. The University of Michigan’s preliminary June Index of Consumer Sentiment tallied in at 60.5, beating the estimate for 53.5 and rising from 52.2 in May. Year-ahead and long-run inflation expectations also fell. Still, consumers remain worried about the stock market, the labor market, and business conditions, with confidence levels in these areas well below where they were six months ago.

On the trade front, UK Prime Minister Keir Starmer said that the U.S. and UK have made progress in reaching a final trade deal, saying “There’s nothing unexpected in the implementation, and so we haven’t got any hiccups or obstacles.”

The S&P 500 ended the week with a 0.41% loss while the Nasdaq 100 fell by 0.57%.