US, Iran tensions take a toll on the US markets; Dow Jones falls 267 points, S&P500 and NASDAQ end 0.3% lower

The geopolitcal risks are back on the table as the US deployed naval ships in the Middle East, sending shockwaves to the stock markets as key indices like Dow Jones fell 0.5% on Thursday. The S&P500 and NASDAQ also closed 0.3% lower following the developments in the Middle East.

Investors also trimmed their bets ahead of key economic data scheduled to be released on Friday. The core PCE inflation data will set the tone for the Federal Reserve policy decision trajectory after inflation numbers came in below expectations and near the targeted range of 2%.

The regional deployment of US naval ships and aircraft carriers has increased the risk of a US military attack on Iran’s nuclear facilities, missile stockpile, or to topple its regime. Following the development, the crude oil prices too spiked nearly 2% above the $70 mark for the Brent Crude oil.

At the stock-specific level, the retail chain owner, Walmart, posted better-than-expected earnings for the quarter. However, the company provided for a weak guidance for 2026, which soured the investor sentiment for the stock and for the broader markets. Following the development, Walmart shares tumbled 1.3% on Thursday.

On the currency front, the US dollar is heading for a strong weekly gain after robust economic data and hawkish Federal Reserve commentary in the FOMC minutes boosted the demand for the greenback.

Meanwhile, software stocks witnessed renewed selling pressure as investors are reconsidering their bets on the stocks. Salesforce plunged over 1.2%, Cognizant dropped 3% and Accenture fell by nearly 4% on Thursday.