Mar 26, 2026 - Major U.S. stock indexes fell Thursday as investors grew concerned over the potential for a prolonged conflict between the United States, Israel and Iran.
The S&P 500 declined about 1.2%, the Dow Jones Industrial Average dropped roughly 400 points or 0.8%, and the Nasdaq Composite lost around 1.5%, according to market data. Energy shares rose on higher oil prices, while airline and consumer discretionary stocks declined amid rising fuel costs and economic uncertainty.
The declines followed weeks of escalating tensions that began in late February with U.S. and Israeli strikes on Iranian targets. Iran responded with missile and drone attacks on regional sites, including a strike on a fuel tank at Kuwait International Airport earlier this week, and imposed restrictions on maritime traffic in the Strait of Hormuz. The waterway, which normally carries about one-fifth of global oil trade, has seen shipping volumes drop sharply, contributing to a surge in oil prices. Benchmark Brent crude traded near $110 per barrel Thursday, up significantly from levels before the conflict intensified.
President Donald Trump stated Wednesday that Iran seeks a deal to end the fighting despite Tehran's denials of negotiations. Iran rejected a U.S. 15-point ceasefire proposal delivered through intermediaries and outlined its own conditions for any pause in hostilities. No agreement has been reached.
The U.S. military deployed elements of the 82nd Airborne Division to the Middle East this week, adding to the roughly 50,000 American troops already in the region. Earlier, Israeli forces reported killing Alireza Tangsiri, commander of Iran's Islamic Revolutionary Guard Corps Navy, in a strike on Bandar Abbas. Tangsiri oversaw Iranian operations in the strait.
The disruptions have affected global energy supplies, prompting rerouting of tankers and increased costs for shipping companies. Several sectors, including transportation, faced pressure from higher fuel expenses, while defense and energy companies saw gains.
As of Thursday afternoon, trading remained volatile with investors monitoring developments in the Persian Gulf. Diplomatic efforts through third parties continued without a breakthrough, and military activities persisted in the region with no immediate resolution to the conflict.
