Iran Strikes, Hawkish Fed, and Trump Tweets Send Markets into Free Fall

Wall Street suffered its third consecutive losing session on Tuesday, with the Dow falling 419 points and the Nasdaq dropping 1%. The downturn is attributed to a combination of factors, including geopolitical tensions, bond market stress, and a hawkish new Federal Reserve chair. According to CNBC's Jim Cramer, three forces are driving market volatility: Iran, the Fed, and the president.

The recent U.S. strikes on Iran have pushed Brent crude prices up 4.6% to $95.70 a barrel, with U.S. crude closing above $90 for the first time in over a month. Cramer notes that this pattern repeats whenever ceasefire hopes fade. He also warns of the Fed's hawkish stance under new Chair Kevin Warsh, who has signaled he would raise rates even at the cost of a recession.

The president's tweets are also taking a toll on markets, with Cramer estimating that a provocative post can shave off about a quarter point from major indexes. An actual strike can cut markets by half a percent and add two percentage points to oil prices. As a result, investors have trimmed exposure across both stocks and crypto.