US Stocks Close Lower as Renewed Middle East Conflict Sends Dow Down 419 Points

Wall Street ended lower on Tuesday as renewed conflict between the United States and Iran revived fears of higher oil prices and inflation. Investors also questioned whether the Federal Reserve might tighten monetary policy.

The Dow Jones Industrial Average fell 419.02 points, or 0.79%, to 52,766.88. The S&P 500 dropped 0.71% to 7,631.47, while the Nasdaq Composite lost 1.03% to 26,099.77. The Philadelphia Semiconductor Index fell 2.14% to 11,288.61.

Oil prices rose after a tanker passing through the Strait of Hormuz was hit by three unidentified flying objects on Monday. US President Donald Trump also threatened a response to recent Iranian attacks on US military bases, saying, "We will hit them hard."

Bond yields continued to climb globally. The yield on the 10-year US Treasury rose to its highest level since January 2025, as markets worried that sustained oil-price gains could push inflation higher and influence the Fed's decision at its meeting in two weeks.

The CME FedWatch tool put the probability of a quarter-point rate increase in September at about 68.2%, up from 39.6% a week earlier. Nvidia fell 1.51%, Microsoft 1.24%, Amazon 1.87% and Tesla 3.22%. Apple rose 2.61%, while Meta gained 1.08% and Alphabet fell 1.01%. Taiwan Semiconductor's American depositary receipts declined 0.32% to close at $414.

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We will hit them hard.