Wall Street moved lower on Wednesday after President Donald Trump declared the interim US-Iran accord ‘over,’ reigniting fears of conflict near a critical global energy route. The Dow Jones Industrial Average fell roughly 1.5%, the S&P 500 dropped 0.7%, and the NASDAQ Composite declined 0.8% by late morning trading.
The market reaction was notable but orderly. Oil prices spiked sharply, Treasury yields climbed, and investors rotated away from travel and consumer stocks. However, gains in chip and energy shares helped cushion the broader decline across major indices.
Stocks Fall, But Losses Stay Contained
US equities opened under pressure after Trump said he had no interest in further talks with Iran and warned of possible additional US strikes. The comments followed renewed attacks tied to the Strait of Hormuz, a key waterway for global oil flows.
Despite the tension, the selloff remained narrower than a full risk-off event. At 11:30 a.m. ET, the Dow was down 810 points to 52,115. The S&P 500 slipped to 7,431, while the NASDAQ fell to 25,565. Decliners outpaced advancers on both the NYSE and NASDAQ, signaling broad caution.
Oil Jumps as Hormuz Risks Return
Oil prices delivered the clearest market reaction to Trump’s remarks. Brent and US West Texas Intermediate crude both surged more than 5% as traders reassessed supply risks from the Gulf region.
The move was not worse because traders had already priced in months of Middle East disruption. Some investors also waited to see whether shipping through the Strait of Hormuz would face a fresh full blockade. Fiona Cincotta of City Index captured this caution, saying, “This was always a very fragile peace process.”
Chip Gains Cushion NASDAQ
Technology stocks offered partial support, mainly through chipmakers. Broadcom rose after Apple announced plans to spend more than $30 billion under a chip-supply agreement with the company. This gain helped ease pressure on the NASDAQ, which has faced recent volatility.
The Philadelphia SE Semiconductor Index also advanced, while energy was one of the few S&P 500 sectors in positive territory. Nine of the 11 main S&P 500 sectors traded lower. Travel shares weakened as higher fuel prices raised cost concerns for airlines and cruise operators.
Investors Watch Fed Minutes
The timing added another layer for markets, with the Federal Reserve set to release minutes from its June policy meeting at 2 p.m. ET. The meeting was the first under Chair Kevin Warsh, who has shifted away from forward guidance and kept rates unchanged at 3.50% to 3.75%.
Higher oil prices brought inflation risk back into focus before the release. Ian Lyngen of BMO Capital Markets said June core inflation figures could draw less attention if crude keeps moving higher in July. He added that the Fed minutes may look “somewhat stale” after the latest Middle East turn.
Doubts Keep the Reaction Measured
Analysts pointed to uncertainty rather than a single clear market path. Matthew Ryan of Ebury said ‘the million-dollar question’ was whether talks had fully broken down or only hit a temporary setback. This doubt helped explain why stocks fell but did not collapse.
Meanwhile, the International Monetary Fund lowered its 2026 global growth forecast to 3.0% and cited war-related energy risks. The update gave investors another reason to watch oil, inflation, and central bank policy closely, while markets waited for clearer signs on Iran, shipping flows, and Fed thinking.
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