USD Gains, Stocks Fall as Israel-Iran Tensions Spike Risk Aversion

US equities tumbled sharply Friday with NASDAQ down 1.18% (-231 points) to 19,431, approaching its 100-hour MA at 19,349, while S&P 500 remained above its 100-hour MA at 5,953. The sell-off accelerated despite better-than-expected University of Michigan consumer sentiment data, as geopolitical tensions overshadowed positive economic indicators. US Treasury yields paradoxically rose, decoupling from typical safe-haven flows seen during geopolitical stress, suggesting complex market dynamics. The dollar strengthened broadly as traders sought safety, with oil prices surging on Middle East supply concerns following reports of Israeli strikes on Iranian nuclear facilities. Technical indicators show NASDAQ testing critical support levels, with a break below 19,350 potentially triggering further downside. The unusual bond market behavior suggests inflation concerns may be outweighing flight-to-quality flows, creating a challenging environment for risk assets.