Stock market today: Dow, S&P 500, Nasdaq recover from major sell-off as Wall Street watches Iran fallout

March 2, 2026 - 19:27

Major U.S. stock indices climbed higher on Monday, recovering from a steep sell-off late last week. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all posted gains as the market digested the potential fallout from escalating tensions in the Middle East.

The primary focus for investors remains firmly fixed on the crisis’s economic implications, particularly for energy markets. The immediate concern is the conflict’s impact on global oil prices. A sustained surge in crude costs threatens to reignite inflationary pressures, a persistent worry for the Federal Reserve. This geopolitical uncertainty adds another layer of complexity to an already fragile backdrop for equities, characterized by concerns over stubborn inflation and the timing of potential interest rate cuts.

While the rebound suggests a measure of calm returning to trading floors, analysts note that sentiment remains cautious. The market’s direction in the coming sessions is likely to be heavily influenced by the trajectory of oil prices and any further developments abroad. Investors are weighing the risk of a broader regional conflict against the current resilience of the U.S. economy, leading to a tentative and highly reactive trading environment. The prevailing question is whether the shock will be contained or if it will lead to more persistent economic headwinds.