The Dow falls 800 points and oil prices surge as Israel attacks Iran

U.S. stocks fell sharply on Friday, with all three major market indexes deep in the red following Israel's attack on Iranian nuclear facilities, which began overnight and continued into Friday. Oil prices rocketed more than 8%.

The Dow Jones Industrial average dropped 787 points in afternoon trading, or 1.8%. The S&P 500 lost 1%, and the Nasdaq was off 1.1%.

On the back of those rising oil prices, airline stocks slipped, with Delta and United Airlines both off about 4%. Energy stocks rose alongside crude, and defense stocks climbed on expectations of extended military action. At the same time, the VIX — a key measure of market volatility — spiked more than 17%.

A loop of 'don’t blink' brinksmanship

The market’s reaction may be swift and stiff, but the political calculus remains uncertain.

While the U.S. has a long history of behind-the-scenes alignment with Israeli military actions, and the strikes follow months of both strategic and inadvertent U.S. leaks to the news media, multiple outlets characterize the Israeli action as a “snub” to the Trump administration that left the White House out of the decision-making process. Secretary of State Marco Rubio insists the Israeli strike was “unilateral.”

A natural question now is: Why does Iran persist with its nuclear program, even in the face of seemingly devastating military consequences? The answer is complex, but experts have long believed Tehran views nuclear capability as the ultimate deterrent — a way to survive sanctions and the threat of regime change. Essentially, the strategy, however dangerous, may not be about avoiding strikes. It may be more about surviving them long enough to secure irreversible leverage. Where those possible plans stand amid Friday’s smoking wreckage is not clear.

Oracle soars on cloud demand and Adobe beats expectations, Fed news next

Oracle stock rose 13% late Thursday to close just shy of $200 per share after blowout earnings that showed just how quickly and steeply demand is rising for AI-powered cloud services. The company posted a 52% year-over-year jump in cloud infrastructure revenue and forecast even faster growth in 2026, with total cloud sales projected to rise more than 40%. Oracle stock was up about 8% despite the broader selloff.

Adobe also posted earnings late Thursday, raising its full-year sales and profit forecasts. AI was the driver for it too, with total revenue rising 11% over last year to nearly $6 billion.

The coming week promises more high-stakes news. The Federal Reserve is set to release its latest policy decision and economic projections, while Accenture, CarMax, Kroger, and Darden Restaurants will all report.