Financial markets retreated after President Donald Trump declared the U.S.-Iran ceasefire had effectively ended, reigniting fears of a broader Middle East conflict. Investors quickly shifted toward safer assets as concerns over energy supplies resurfaced. Consequently, U.S. equities declined, oil prices climbed, and market volatility accelerated.
Around $500 billion in U.S. stock market value disappeared within hours as traders assessed the possibility of renewed military action. Besides, optimism surrounding recent diplomatic progress between Washington and Tehran faded as geopolitical risks returned to the forefront.
Oil Supply Fears Drive Market Moves
Trump also warned that the United States could severely damage Iran’s critical infrastructure during any future escalation. Additionally, he pointed to Kharg Island, Iran’s primary crude export terminal, after recent military operations targeted the area.
Any prolonged disruption there could significantly reduce global oil exports and tighten energy supplies. Consequently, Brent crude surged 7.2% to $79.48 per barrel, although it remained below its earlier conflict peak near $120.
Stocks Slide as Diplomatic Progress Unravels
Last week’s indirect negotiations in Doha, involving U.S., Iranian, Qatari, and Pakistani representatives, had raised hopes for de-escalation. However, Trump’s latest remarks overshadowed that progress and revived uncertainty across financial markets.
The S&P 500 lost 0.8%, while the Dow Jones Industrial Average dropped 745 points, or 1.4%. Moreover, the Nasdaq Composite slipped 0.7% as investors prepared for the possibility of further regional tensions.
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