S&P 500 Stocks That Dropped the Most Since the U.S. and Israel Attacked Iran

The U.S.-Israel military strike on Iran on February 28 gave markets a jolt that most investors had been quietly dreading. But what caught many off guard wasn''t just the geopolitical shock, it was the one-two punch that followed. Friday''s February jobs report confirmed that the U.S. economy shed 92,000 nonfarm payrolls, the third decline in five months and a number that came in brutally below the 50,000 gain economists had penciled in. By the time Friday''s close rolled around, the mood on Wall Street had soured considerably.

The week ending March 6 saw 75% of S&P 500 components finish lower. The Dow Jones Industrial Average fell 453 points (0.9%) on Friday to close at 47,501.55, posting a weekly decline of 3%. The S&P 500 dropped 1.3% on Friday and ended the week 2% lower. The Nasdaq fell 1.4% Friday and shed 2.2% for the week. Two separate macro shocks in one week tend to do that.

The selloff wasn''t random. It sorted itself along very clear fault lines: anything connected to global travel, discretionary consumer spending, or cyclical industrial demand got hit hard. Meanwhile, energy and defense held up or outright surged.

The Full Damage: Worst S&P 500 Performers Since the Attack

Here are the 20 stocks in the S&P 500 that dropped the most in the week through March 6, according to LSEG data:

• Norwegian Cruise Line Holdings (NCLH): -19.1%
• Carnival Corporation (CCL): -18.3%
• AES Corporation (AES): -18.1%
• Corning (GLW): -18.0%
• Sandisk (SNDK): -17.0%
• Ciena (CIEN): -15.6%
• Southwest Airlines (LUV): -15.6%
• Estee Lauder (EL): -15.3%
• Lam Research (LRCX): -14.8%
• Teradyne (TER): -14.7%
• ON Semiconductor (ON): -14.5%
• Ford Motor (F): -13.8%
• NRG Energy (NRG): -13.8%
• Seagate Technology (STX): -13.5%
• PPG Industries (PPG): -13.4%
• United Airlines (UAL): -13.4%
• Microchip Technology (MCHP): -13.2%
• Baxter International (BAX): -13.2%
• Qnity Electronics (Q): -13.1%
• Freeport-McMoRan (FCX): -12.8%

Royal Caribbean Cruises (RCL) was the sixth-worst performer overall with a 14.2% decline for the week.

Cruise Lines and Airlines: The Worst of a Bad Week

The biggest losers since the attack began weren''t tech stocks or financials. They were leisure names, specifically the cruise lines, which face a particularly nasty combination of risks when the Middle East flares up.

Norwegian Cruise Line Holdings was the hardest hit in the entire S&P 500 at -19.1%, followed by Carnival at -18.3% and Royal Caribbean at -14.2%. The logic here is straightforward. Cruise itineraries through the Mediterranean and Middle East don''t just lose revenue when conflict erupts in the region, they trigger a broader consumer confidence hit that dents bookings globally. These aren''t companies with fat balance sheets that can absorb prolonged demand disruption. Carnival is already 15.6% lower year-to-date in 2026, making it one of the weaker performers in the index before this week even started. Norwegian is down 10.2% for the year. The attack effectively punched down on stocks that were already struggling.

Airlines were also in the crossfire. United Airlines (UAL) dropped 13.4% for the week, consistent with its position as the most internationally exposed of the major U.S. carriers. Southwest Airlines (LUV) fell 15.6%, though its exposure to international routes is far more limited. Southwest''s decline likely reflects broader economic fear from the jobs report rather than direct war impact.

Semiconductors Got Caught in the Crossfire

The semiconductor names on the worst-performers list are worth examining separately, because their sell-off tells a different story. ON Semiconductor (ON) fell 14.5% for the week. Lam Research (LRCX) was down 14.8%. Teradyne (TER) dropped 14.7%. Microchip Technology (MCHP) fell 13.2%.

These aren''t cruise line-style demand destruction stories. What''s happening here is more nuanced. Geopolitical escalation in the Middle East raises real concerns about supply chain disruptions, oil price-driven input cost inflation, and a potential pullback in global capital spending if conflict drags on. Semiconductor equipment companies in particular are sensitive to any signal that the global industrial economy is hitting the brakes. The February jobs report, with its 92,000 payroll loss and a revised December that flipped from a gain of 48,000 to a loss of 17,000, provided exactly that kind of signal.

Sandisk (SNDK) fell 17% for the week despite being up an extraordinary 122.1% year-to-date heading into it. Even after the pullback, the stock is still one of the best performers in the index for 2026.

Sector Performance: Materials Led the Declines

Looking at the 11 S&P 500 sectors since the close of February 27, the damage was broad but uneven:

• Materials: -7.2% for the week. Not because of direct war exposure, but because commodity demand tends to weaken when recession fears spike and global growth expectations get revised down.
• Consumer Staples: -4.9%, a surprising move for a traditionally defensive sector.
• Healthcare: -4.6%, partly a read-through from the jobs report given that healthcare accounted for 28,000 of the 92,000 job losses in February, mainly due to the Kaiser Permanente strike in California and Hawaii.
• Industrials: -4.1%.
• Information Technology: -0.4%, the relative outperformer among cyclical sectors.
• Energy: +1.0% for the week and up 25.6% in 2026, the clear winner.

Exxon Mobil and Chevron each gained roughly 4% on Monday alone as oil prices surged to eight-month highs. Defense names also surged, with Lockheed Martin and Northrop Grumman both jumping 6%, while drone maker AeroVironment climbed more than 10%.

What the Jobs Report Actually Tells You

The February employment data was harder to dismiss than typical noisy monthly readings. Three things stand out. First, the 92,000 payroll loss was the sharpest drop in four months. Second, prior months were revised sharply lower: December went from a reported gain of 48,000 to a loss of 17,000, meaning the economy was already weaker than the data suggested going into February. Third, the unemployment rate ticked up to 4.4% with 7.6 million Americans out of work.

There are some mitigating factors. The Bureau of Labor Statistics noted that the healthcare decline was largely driven by the Kaiser Permanente strike, which pulled roughly 30,000 workers from the count during the survey week but has since been resolved. Federal government employment fell another 10,000 in February, bringing the total federal workforce reduction to 330,000 since October 2024. Manufacturing shed 12,000 jobs, and construction lost 11,000.

Traders moved to price in the next rate cut at July following the report, with increasing bets on two cuts before year-end, according to CME FedWatch data. A weaker labor market combined with geopolitical oil price pressures puts the Fed in a genuinely uncomfortable position: cut too early and risk reigniting inflation from elevated energy costs, wait too long and risk letting the labor market deteriorate further.

Historical Context: Markets Tend to Recover

The S&P 500''s reaction to military conflict tends to follow a recognizable pattern. Carson Group strategists analyzed 40 major geopolitical events over the past 85 years and found that the index loses an average of 0.9% in the first month following such events but gains 3.4% over the subsequent six months.

CNBC reported that the market largely bought the dip on Monday, with the S&P 500 finishing just above flat after initially falling as much as 1.2% at the session''s lows. Investors piled back into large-cap tech leaders like Nvidia and Microsoft, reasoning that cash-rich companies with strong balance sheets are the most resilient to war-driven volatility.

That instinct isn''t wrong, but it doesn''t account for the jobs data sitting underneath all of this. Geopolitical shocks are typically resolved within a defined timeframe. A structural deterioration in the labor market, with three payroll declines in five months and downward revisions piling up, is a slower-moving and potentially more consequential risk for equity valuations.

The probability-weighted scenario that deserves the most attention right now: if the Iran conflict remains contained, oil prices stabilize below $90, and the March jobs report shows the healthcare losses were strike-related and temporary, then the current selloff looks like a buying opportunity in oversold consumer cyclicals and semiconductors. But if oil breaches $90-$100 and labor market weakness proves structural rather than transitory, the next leg lower could be considerably more serious.

For now, the message from the data is clear: travel-facing stocks are pricing in real demand disruption, energy and defense are the natural beneficiaries of a prolonged conflict scenario, and the Fed''s next move has suddenly become a lot harder to predict.

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Disclaimer: This article is for informational purposes only and should not be considered financial advice. Stock investing involves significant risk, including potential loss of principal. Always conduct your own research and consult with a qualified financial advisor before making investment decisions.