US market selloff continues as Iran war sends consumer sentiment plummeting

Market Overview - The US stock market experienced a significant selloff, with the Dow briefly entering correction territory after a survey indicated a sharp decline in US consumer sentiment in March [1][3] - The tech-heavy Nasdaq index also entered correction territory, marking its largest drop since the onset of the US-Israel war on Iran [2] Consumer Sentiment - A survey from the University of Michigan revealed that US consumer sentiment fell by 6% in March, reaching its lowest level since December 2025 [3][4] - The decline in sentiment was particularly pronounced among consumers with middle to higher income and stock wealth [4] Economic Expectations - Short-term economic expectations among consumers plummeted by 14%, while long-term expectations saw less severe declines [5] - The survey indicated that consumers may not anticipate recent negative developments to persist, although this view could change if the Iran conflict prolongs or if rising energy prices contribute to overall inflation [5] Inflation Projections - Inflation expectations for the year increased from 3.4% to 3.8%, marking the largest one-month rise since April of the previous year [4] - The Organization for Economic Cooperation and Development (OECD) revised its global GDP growth projections downward, citing significant uncertainty around global demand due to the Middle East conflict [5] Global Economic Impact - The ongoing conflict in the Middle East is expected to have human and economic costs, testing the resilience of the global economy [6] - Disruptions in energy supply and increased energy prices are anticipated to lead to higher global inflation, with the UK economy projected to be more adversely affected than other industrialized nations [6]