Nasdaq Falls Into Correction as Iran War Uncertainty Rattles Tech Stocks and Markets

TLDR

• The Nasdaq Composite dropped 2.4% on Thursday, falling over 10% from its October 29 record high, confirming a correction
• The selloff is driven by uncertainty over the U.S.-Israeli war with Iran and fears of rising oil prices and inflation
• Gas prices in the U.S. hit $3.98, up $1.00 in just one month
• Meta Platforms dropped 8% after two court verdicts found it liable for harm to young users
• Nvidia, Alphabet, and Tesla all fell between 3.4% and 4.2% on Thursday

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The Nasdaq Composite is officially in correction territory. The index dropped 2.4% on Thursday, putting it nearly 11% below its record-high close from October 29, 2025. This is the first time the Nasdaq has confirmed a correction in a year.

NASDAQ Composite (^IXIC)

The drop marks the index’s worst decline since April 2025, when President Trump’s “Liberation Day” tariff announcement sent global markets falling.

The Nasdaq is now down nearly 8% in 2026 and sits at its lowest point since early September 2025.

The main driver of the selloff is ongoing uncertainty around the U.S. and Israeli war with Iran. Investors are unsure how long the conflict will last and what it means for the global economy.

A Seeking Alpha community poll found most subscribers expect the operation to last up to three months. The White House has suggested a four-to-six week timeline. The gap between those estimates is adding to market nervousness.

Energy prices are rising fast. The average U.S. gas price is now $3.98 per gallon, up $1.00 from just one month ago. Seasonal demand is expected to push prices higher as spring begins.

Analysts say the energy shock could push inflation higher, or it could reduce consumer demand enough to slow the economy. The outcome depends heavily on how long the conflict continues.

Tech Stocks Take the Hit

Tech stocks have been hit hard. Nvidia fell 4.2%, Alphabet dropped 3.4%, and Tesla lost 3.6%. The Roundhill Magnificent Seven ETF dropped 3.3% and is now down 17% since the Nasdaq’s October peak.

Investors are also questioning whether massive AI spending by companies like Microsoft, Alphabet, and Amazon is paying off fast enough. The concern is that heavy infrastructure investment has not yet translated into meaningful revenue growth.

“There definitely has been an erosion in market enthusiasm since hostilities broke out,” said Steve Sosnick, market strategist at Interactive Brokers.

Meta Adds to the Pressure

Meta Platforms was one of the biggest drags on the index Thursday, falling 8%. Two court verdicts found Meta liable for harm to young users, raising fears the company may need to overhaul its advertising model.

The losses across Big Tech are amplified because these stocks now make up a large share of both the Nasdaq and the S&P 500. A pullback in any of them hits the broader index hard.

Jim Carroll, senior wealth adviser at Ballast Rock Private Wealth, described the market’s back-and-forth moves as enough to “make people seasick.”

The Nasdaq fell nearly 23% from its 2024 high before recovering through October 2025. Investors are now watching whether this correction follows a similar path, or deepens further.

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