Dow Jones, S&P 500 fall as fresh strikes on Iran send oil prices higher

US stocks fell on Wednesday, July 8, after the United States President Donald Trump announced the end of the fragile ceasefire with Iran and launched strikes. The rising oil prices also dented investor confidence.

The Dow Jones Industrial Average settled 1.09% lower at 52,348.39, while the S&P 500 slipped 0.28% to 7,482.71. The NASDAQ Composite defied the trend and advanced 0.2% to 25,870.65.

The tensions flared after Iran reportedly attacked three commercial ships. Iran and the US, as per the interim deal, had agreed to allow ships to cross the strait without paying a toll for 60 days. However, Tehran asserted it would control the vessels' routes and would later charge fees for the passage. The ships that were attacked on Tuesday were reportedly using a route close to Oman's shore, instead of one ordered by Iran.

Trump, on the Truth Social platform, said that the attack was a retribution for Tuesday's bombing. "If it happens again, it will get much worse!" he warned.

Taking to X, U.S. Central Command said that the strikes were carried out to further degrade Iran's ability to threaten freedom of navigation in the Strait of Hormuz.

"The United States is holding Iran accountable for recent unjustified aggression against commercial shipping and civilian crews freely navigating a vital international waterway," it said.

Oil prices came under renewed pressure as the intensifying conflict heightened concerns over potential disruptions to crude oil supplies via the Strait of Hormuz, one of the world's most critical energy transit routes, he added.

In energy trading, West Texas Intermediate (WTI) rose 0.88% to $74.17 per barrel. Brent crude, the international standard, jumped 0.90% to $78.92 per barrel.

In Asian markets, South Korea's Kospi rose 0.76%, Japan's Nikkei 225 index gained 1.96%, Hong Kong's Hang Seng index jumped 0.16% and Shanghai's SSE Composite index rose 0.20%.

Indian markets are also likely to open in the positive territory. GIFT NIFTY was trading 0.46% higher.