Wall Street experienced a significant decline on Friday as Iran launched missiles at Israel in response to Israeli strikes aimed at disrupting Tehran's nuclear capabilities. Explosions were reported in Tel Aviv and Jerusalem, with sirens blaring across Israel following the missile launches from Iran. This escalation in the Middle East has raised concerns among global investors, leading to a sharp drop in stock prices.

Oil prices surged nearly 7% due to fears that the conflict could disrupt crude supply from the Middle East. U.S. energy stocks, including Exxon and Diamondback Energy, saw gains as a result. Elias Haddad, a senior markets strategist at Brown Brothers Harriman, warned of the potential impact on global markets if the conflict escalates further and affects oil supply routes like the Strait of Hormuz.

Airline stocks tumbled amid concerns of rising fuel costs, with Delta Air Lines, United Airlines, and American Airlines all experiencing significant declines. On the other hand, defence stocks such as Lockheed Martin, RTX Corporation, and Northrop Grumman saw gains as tensions between Israel and Iran heightened.

The S&P 500, Nasdaq, and Dow Jones Industrial Average all ended the day in negative territory, with most S&P 500 sector indexes posting losses. Financials and information technology were among the worst-performing sectors.

Despite the overall decline, some individual stocks stood out. Adobe faced a 5.3% drop, while Oracle surged to a record high with a 7.7% gain. Visa and Mastercard both fell over 4% following reports of major retailers exploring cryptocurrencies as alternative payment methods.

Investor concerns around tariff-driven price pressures were somewhat alleviated by recent economic data, including a tame consumer price report and unchanged initial jobless claims. The Federal Reserve is expected to maintain interest rates at their upcoming meeting, with optimism around potential trade agreements helping to support market sentiment.

The University of Michigan's Surveys of Consumers indicated an improvement in consumer sentiment for the first time in six months, despite ongoing trade uncertainties. Declining stocks outnumbered rising ones within the S&P 500, reflecting the overall negative sentiment in the market.

While the S&P 500 is nearing its record highs from February, the impact of geopolitical tensions on global markets remains a key concern for investors moving forward.