Wall Street is in the grip of its longest losing streak in years as markets respond to escalating tensions in the Middle East. The Dow Jones Industrial Average, Nasdaq Composite and S&P 500 have each fallen more than 7% since the start of the Iran conflict, marking five consecutive weeks of declines.
The market turmoil coincides with fresh developments on the ground. US troops were injured after an Iranian strike targeted an airbase in Saudi Arabia, according to defense officials. Additional US forces have arrived in the region as President Donald Trump hailed ongoing negotiations with Iran.
The market drop has amplified concerns about a potential recession, with investors citing uncertainty over the conflict's duration and economic fallout. Consumer prices have also risen sharply, adding to inflation pressures that predated the current geopolitical crisis.
What the Left Is Saying
Progressive Democrats have blamed the market volatility on Trump administration policies, arguing that the president's approach to Iran has destabilized global markets. Senator Elizabeth Warren of Massachusetts said the administration 'recklessly escalated tensions without a coherent strategy,' adding that working families are paying the price for 'another unnecessary foreign entanglement.'
Progressive lawmakers have called for diplomatic engagement and congressional oversight of war powers. Representative Pramila Jayapal, chair of the Congressional Progressive Caucus, said Congress must 'assert its constitutional authority' and demand the administration pursue negotiated solutions. Progressive economists have also pointed to pre-existing inflation concerns, arguing that oil price shocks from the conflict compound economic pressures on working-class Americans.
What the Right Is Saying
Conservative Republicans have defended the administration's Iran policy, arguing that strength through military positioning is necessary to prevent further Iranian aggression. Senator Lindsey Graham of South Carolina called the troop deployments 'essential to protecting American interests and allies in the region.'
House Republican Conference Chair Elise Stefanik said the market volatility is 'a price worth paying for American security,' arguing that weakness invites more Iranian aggression. Conservative commentators have also blamed the Obama-era nuclear deal for temporarily enriching Iran, saying the current approach prevents a nuclear Iran from threatening US allies. Senate Minority Leader Mitch McConnell noted that 'markets prefer certainty, and the administration is providing clarity that American strength will not be contested.'
What the Numbers Show
The major indices have each declined more than 7% since the conflict began. The S&P 500's five-week slide represents its longest consecutive losing streak since 2020, during the peak of pandemic uncertainty. The Nasdaq's decline has been particularly steep, reflecting investor rotation away from technology stocks amid broader economic anxiety.
Oil prices have risen sharply amid supply concerns, with Brent crude trading above $90 per barrel. The conflict has also impacted bond markets, with yields fluctuating as investors weigh recession risk against potential interest rate moves. Federal Reserve officials have noted the economic uncertainty in recent public comments, though no formal policy changes have been announced.
Consumer price index data shows inflation running at 3.2% year-over-year, with energy costs contributing significantly to recent increases. Manufacturing indices have shown contraction, while consumer confidence has declined for three consecutive months.
The Bottom Line
The five-week market slump reflects investor uncertainty over the Iran conflict's trajectory and economic fallout. The administration has emphasized diplomatic efforts alongside military positioning, but markets remain volatile as developments in the Middle East continue.
What to watch: Any escalation or de-escalation in the Iran situation will likely drive market movement. Congressional Democrats have threatened oversight hearings on war powers, while Republicans are largely supporting the current approach. The Fed's response to conflicting signals of inflation and potential recession will be closely monitored. Energy prices remain a key variable, as further oil shocks could deepen economic concerns.