The Dow Jones Industrial Average fell approximately 230 points, or 0.5%, on Thursday, reversing gains from the previous session as escalating tensions between the US and Iran dampened risk appetite and drove oil prices higher [1]. The S&P 500 dropped 0.8%, and the Nasdaq Composite declined by 1.1%, marking a sharp turnaround from Wednesday's rally, which had been fueled by optimism over a potential US-brokered peace deal with Iran [1]. Dow Jones futures experienced volatility, sliding to 46,200 before rebounding to the 46,800 region and then paring back to early session levels [1].
The risk-off sentiment was evident before the US market opened, with Asian markets selling off overnight after Iran rejected the US's 15-point ceasefire proposal. South Korea's Kospi fell more than 3%, particularly impacted by heavy selling in tech stocks like Samsung following Alphabet's (GOOG) publication of new AI memory compression research [1]. China's Shanghai index and Hong Kong's Hang Seng both dropped around 1%, while European indices followed the trend, with the Stoxx 600 trading roughly 0.8% lower ahead of the US open. Brent Crude surged past $106 during the European morning session [1].
Tensions escalated further as Thursday marked 48 hours until the expiration of President Donald Trump's five-day pause on strikes against Iranian power and energy infrastructure. Trump warned on Truth Social that Iranian negotiators were "very different" and "strange," urging Tehran to "get serious soon, before it is too late" [1]. CNN reported, citing Israel's defense minister, that the commander of Iran's Islamic Revolutionary Guard Corps (IRGC) Navy had been killed, a key figure in the blockade of the Strait of Hormuz [1]. Gulf states issued a joint statement condemning Iran's strikes from Iraqi territory on their energy infrastructure, labeling them "criminal" and signaling readiness to defend themselves. Two fatalities occurred in Abu Dhabi after debris from an intercepted ballistic missile fell [1].
Brent Crude futures jumped around 5% to above $107 per barrel, while West Texas Intermediate climbed more than 4% to near $95, pushing Treasury yields higher, with the 10-year yield approaching "Information not available" [1]. Tobin Marcus, head of US policy and politics at Wolfe Research, commented that markets seemed to be pricing in the possibility that Iran's public rejection of talks was a bluff, but warned that "the ambiguity can't last much longer" with Trump's deadline fast approaching [1].
CONCLUSION
Renewed US-Iran tensions and surging oil prices triggered a broad sell-off across global markets, with the Dow Jones, S&P 500, and Nasdaq all posting significant declines. The market remains highly sensitive to diplomatic developments, and analysts caution that uncertainty will persist until President Trump's deadline passes. Elevated oil prices and geopolitical risks are likely to continue weighing on investor sentiment in the near term.