U.S. stocks suffered their steepest drop since April 2025, with the Dow Jones Industrial Average tumbling 1,153 points, or 2.2%, as escalating tensions between Washington and Tehran rattled investors. The S&P 500 slid 1.5% and the Nasdaq Composite fell 1.7%, ending more than 10% off its all-time high.
The selloff followed President Donald Trump's pledge to strike Iran "hard" after U.S. Central Command intercepted missiles targeting American military facilities in the Middle East. West Texas Intermediate crude futures surged more than 6% to $84.46 a barrel. Semiconductor shares bore heavy losses, with the SOX index dropping over 5%, though UBS argued the sector's selloff is overblown.
The Federal Reserve held interest rates at 3.5–3.75%, with three regional bank presidents dissenting in favor of a quarter-point hike. The 30-year Treasury yield jumped above 5.2%, its highest since 2007. Fed Chairman Kevin Warsh said the central bank will not hesitate to act when necessary.