NEW YORK — All three major U.S. stock indexes fell as the United States and Iran resumed military exchanges after roughly a month.
The Dow Jones Industrial Average closed at 53,185.90 on the 31st, down 374.09 points, or 0.70%, from the previous session. The Standard & Poor's 500 fell 25.62 points, or 0.33%, to 7,686.14, while the Nasdaq Composite dropped 31.53 points, or 0.12%, to 26,370.89.
Among the largest companies by market capitalization, Apple fell 0.89%, Microsoft dropped 1.22%, Amazon lost 2.50%, Google parent Alphabet declined 2.09%, TSMC slipped 0.53% and Facebook parent Meta fell 0.98%. Gainers included Nvidia, up 1.48%, SpaceX, up 1.55%, Broadcom, up 0.42%, Tesla, up 5.51%, Micron, up 2.77%, SK hynix, up 2.20%, and SanDisk, up 5.50%.
Stocks were weak from the opening bell on news that the United States and Iran had resumed military clashes in the Strait of Hormuz. U.S. forces struck two rocket launchers used by the Islamic Revolutionary Guard Corps to lay mines on Iran's Larak Island on the 30th. Iran retaliated on the 31st against Jordan and the United Arab Emirates, both of which host U.S. military bases. President Donald Trump said in a Fox News interview that day that the attack on the U.S. base in Jordan would draw a response and that the United States would hit back hard. On his social media platform Truth Social, Trump said Iran was a failed state and completely dead. He said the country has no navy or air force, no currency, and is not paying its soldiers or police, adding that inflation has reached 300% and that its leadership is in complete disarray and incapable of properly representing the country.
Oil prices surged on the news. On the ICE Futures exchange in London, Brent crude for October delivery settled at $91.22 a barrel, up 3.54% from the previous session. On the New York Mercantile Exchange, October West Texas Intermediate rose 3.39% to $86.23 a barrel.
Both sides left the door open to negotiations. Iranian President Masoud Pezeshkian said at a Shanghai Cooperation Organisation summit that day that Tehran was still working to realize a path of agreement and mutual understanding, and that he believed a continuation of the war served neither Iran, nor the region, nor the interests of humanity. Trump said in the Fox News interview that the Iranians desperately want to meet, but that he did not know whether any deal with them could be trusted.
Hawkish remarks from Federal Reserve Chair Kevin Warsh at the central bank's economic policy symposium in Jackson Hole also weighed on sentiment. In his keynote address, Warsh said policymakers must be confident that underlying inflation is moving toward their target at a clear and sufficient pace, and that if it is not, they have work to do.
