Markets News, March 3, 2026: Major Stock Indexes Fall But Close Well Off Early Lows as Volatility Persists Amid Iran Conflict

Major stock indexes closed lower Tuesday as the conflict in the Middle East escalated, but pared steep declines after President Donald Trump said the U.S. Navy would escort tankers through the Strait of Hormuz if necessary.

The tech-heavy Nasdaq, benchmark S&P 500, and blue-chip Dow finished down 1.0%, 0.9%, and 0.8%, respectively, with the Dow shedding 400 points. The index had been down more than 1,250 points earlier in the session before rebounding.

“Those aren’t moves that suggest investors believe this will have a significant long-term impact on equity markets,” Catalyst Funds CIO David Miller said. “If that were the case, you’d likely see 5% types of decline. It seems more like investors are adjusting expectations from a very short conflict, something that wraps up quickly, to one that could last several weeks.”

Fighting in the Middle East has shown no signs of slowing down since the U.S. and Israel launched military strikes against Iran early Saturday, including one that killed its Supreme Leader, Ali Khamenei. Iran, in turn, has retaliated against Israel and U.S. interests in several countries across the region, with Saudi Arabian officials blaming the nation for a drone attack on the U.S. embassy in Riyadh early Tuesday, and the State Department urged Americans to leave 14 Middle East countries immediately. President Trump said the U.S. plans to continue its combat operations in Iran for four to five more weeks but could go longer.

“I think this is short lived,” said Nancy Tengler, CEO & CIO of Laffer Tengler Investments. “What the market is reacting to today is that this is going to be more prolonged than anticipated but I don’t think that’s true. The volatility is still a buying opportunity right now.”

West Texas Intermediate crude oil futures, the U.S. benchmark, were up 3.6% to $73.80 a barrel at 4 p.m. ET, paring bigger gains after Trump wrote on his Truth Social network that “if necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz, as soon as possible.” They had jumped 8% Monday after Reuters reported that Iranian state media said the nation claimed the important strait was closed and it would set fire to any ship trying to pass.

Shares of U.S. oil companies Exxon Mobil (XOM), Chevron (CVX), Marathon Petroleum (MPC), Occidental Petroleum (OXY), and Phillips 66 (PSX) finished mixed after gaining yesterday.

Defense contractors Lockheed Martin (LMT), RTX (RTX), and Northrop Grumman (NOC) declined mildly after rising sharply yesterday, but Palantir Technologies (PLTR), another government contractor, added 1.4% after having surged 5.8% yesterday to rank among the top S&P 500 and Nasdaq gainers.

Shares of U.S. airlines like Delta Air Lines (DAL), United Airlines Holdings (UAL), and American Airlines Group (AAL) and cruise operators Norwegian Cruise Line Holdings (NCLH), Carnival (CCL), and Royal Caribbean Group (RCL) were mixed after dropping yesterday.

Nvidia (NVDA) shares, which rebounded nearly 3% to pace the Dow yesterday after two sessions of sharp declines, ended down 1.3%. Its Magnificent Seven brethren were mixed.

Target (TGT) stock finished nearly 7% higher after the retailer issued better-than-expected full-year profit and revenue guidance. In other post-earnings moves, shares of Plug Power (PLUG) jumped 22%, Best Buy (BBY) rose 7%, and MongoDB (MDB) plunged 22%.

Bitcoin was trading around $68,400, down from overnight highs of about $69,700, as investors shied away from riskier assets. The U.S. dollar index, which tracks the value of the greenback against a basket of currencies, was 0.6% higher at 98.97.

The yield on the 10-year Treasury notes, which affects interest rates on all sorts of consumer loans, rose to 4.06% after closing Monday at 4.04%. The yield had ended last week at 3.95%

Gold futures pulled back 3.5% to $5,125 an ounce, while silver futures sank 6.5% to $83 an ounce.

“You do have to let these things settle and it could take a couple of weeks,” Tengler added. “I don’t think this is beginning of a bear market.”