Why the Nasdaq Dropped 1.5% This Morning (and Bounced Back by Lunch)
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By Anders Bylund – Mar 2, 2026 at 2:58PM ESTKey PointsThe S&P 500, Dow, and Nasdaq all opened more than 1% lower following the weekend's military action in Iran.All three major indexes recovered to breakeven by noon ET.One weekend of geopolitical tension is a speed bump, not a permanent roadblock.The stock market took some wild turns on Monday. The leading market indexes started the day well below Friday's closing levels. The S&P 500 (^GSPC +0.04%) opened 1.2% lower.
The Dow Jones Industrial Average (^DJI 0.15%) dropped 1.1%. As usual, the volatile Nasdaq Composite (^IXIC +0.36%) took a wider turn, starting at a 1.5% drop. Image source: Getty Images. These moves made sense in light of recent events. A joint American and Israeli operation launched attacks on Iran over the weekend. As a direct result, oil and natural gas prices rose more than 6%, soaring to values not seen since June 2025. Wall Street went into defensive mode. But investor nerves calmed down after the opening bell. All three indexes were back to breakeven by noon ET, and the Nasdaq even rose as much as 0.4%. The leading market sectors today are energy, industrials, and technology, while consumer goods stocks remain down on both the cyclical and defensive sides. ^SPX data by YCharts Patience, young grasshopper Days like this can make your attention wander from your actual investing goals. A 1.5% drop sounds scary at breakfast. A flat finish by lunch sounds like nothing happened. Both reactions miss the point, though. What really matters is whether the companies you own are still solid, still growing, still worth holding. The names that make up the heavyweight indexes above usually fall in that category, which is why long-term investing in indexes through index funds works so well. ExpandSNPINDEX: ^GSPCS&P 500 IndexToday's Change(0.04%) $2.74Current Price$6881.62Key Data PointsDay's Range$6796.85 - $6901.0152wk Range$4835.04 - $7002.28Volume3.5B Spoiler alert: one weekend of geopolitical tension rarely changes that truth. Wall Street has seen many crises and macroeconomic challenges over the years, and the index points still tend to rise in the long run.Read NextMar 2, 2026 •By David DierkingSurvey: Nearly 70% of Individual Investors Expect Stock Market Gains in 2026, Despite Half Citing Recession RiskMar 1, 2026 •By Adria CiminoPalantir Billionaire Peter Thiel Just Made a Shocking Move, Delivering a $74 Million Warning to Wall Street.
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History Is Clear About What the Next 12 Months Could Look Like.About the AuthorAnders Bylund is a contributing Motley Fool media and technology analyst covering semiconductors, cloud computing, internet infrastructure, quantum computing, and streaming media. Previously, Anders was a systems administrator for Nielsen Technology and CSX, gaining hands-on experience with enterprise-class systems. He was also a freelance writer for Ars Technica, TIME, USA Today, CNN, WIRED, and AOL's Daily Finance. He holds a bachelor’s degree in English and a master’s degree in library and information sciences from Florida State University. He believes in coyotes and time as an abstract.TMFZahrimX@TMFZahrimStocks MentionedS&P 500 IndexSNPINDEX: ^GSPC$6,881.62(+0.04%)+$2.74Dow Jones Industrial AverageDJINDICES: ^DJI$48,904.78(-0.15%)-$73.14NASDAQ Composite IndexNASDAQINDEX: ^IXIC$22,748.86(+0.36%)+$80.65*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.