Escalating tensions in the Middle East have heightened market concerns about the expansion of the Israel-Palestine conflict. U.S. stocks continue their downward trajectory, safe-haven assets are on the rise, and gold has surpassed the $2,000 mark for the first time in over two months.
According to CCTV, Israel's Defense Minister has unveiled a military strategy for the Gaza Strip, aiming to dismantle Hamas's military capabilities in three phases, eradicate the organization, and establish a new "security regime" in the area. The Israeli Defense Ministry stated that so far, 1,000 tons of weapons have been delivered to Israel. The Israeli military is ramping up preparations for a ground assault on Gaza and, given the ongoing attacks from Hezbollah in northern Israel, is also preparing for multi-front operations.
Xinhua News Agency reported that U.S. officials have said that several U.S. military bases in Syria and Iraq have been targeted by at least four drone attacks in the past three days, resulting in injuries to U.S. personnel. Global Times mentioned that a U.S. base in Iraq has also been under continuous rocket attack. Some U.S. media outlets have warned that the series of attacks on U.S. forces stationed in the Middle East this week might drag the U.S. "further into a new regional war."
The Nasdaq Composite Index dropped by more than 1% in early trading. The S&P 500 Index also declined by about 1% in the morning session, while the Dow Jones Industrial Average, which had briefly turned positive, was down by over 200 points or 0.6% in early trading.
All three major U.S. stock indices are on track for three consecutive days of losses, with both the Nasdaq and the S&P 500 set for four days of declines this week.
Among the S&P 500 sectors, non-essential consumer stocks, including Tesla, IT stocks like Apple and chipmakers, communication services including Google, energy, and finance all declined by more than 1%.
Leading tech stocks took a hit across the board. Tesla, which plummeted on Thursday following its earnings report, continued its downward trend, dropping about 3.8% in early trading. It's set to decline for the third consecutive day and is on track for a weekly drop of at least 10%.
Of the FAANMG tech giants, Amazon was down more than 2% in early trading, while Apple, Microsoft, Alphabet (Google's parent company), and Meta (Facebook's parent company) all declined by over 1%. Netflix, which surged 16% on Thursday after its earnings release, turned negative, dropping just under 1%.
Chip stocks are poised for their fourth consecutive day of losses, with the Philadelphia Semiconductor Index and the semiconductor industry ETF SOXX both down more than 1% in early trading. Arm Holdings dropped nearly 5%, NVIDIA declined by more than 1%, while Intel and AMD saw smaller declines of less than 1%.
