Escalating tensions in the Middle East have shaken investor confidence, particularly concerning riskier investments in the United States stock market.

On Tuesday, the US stock market experienced a sharp decline following Iran’s ballistic missile attack on Israel, which Iran asserted was retaliation for Israel’s military actions against Hezbollah in Lebanon.

The S&P 500 index decreased by as much as 1.4% before closing down 0.9%.

Similarly, the Nasdaq Composite Index dropped by as much as 2.3% but ultimately concluded the day down 1.5%.

Amid the turmoil, investors flocked to safe-haven assets, leading to a surge in the purchase of gold, Treasuries, and the U.S. dollar.

Historically, geopolitical conflicts have often led to market declines, as seen during the 2022 invasion of Ukraine.