Dow falls 500 points as Trump's Iran remarks send oil prices higher

US stocks opened lower on Wednesday after President Donald Trump said an interim agreement aimed at ending the conflict with Iran was "over," triggering a broad risk-off move across global markets as oil prices surged and investors reassessed geopolitical risks.

The Dow Jones Industrial Average fell about 509 points, or 0.96%, while the S&P 500 declined 0.56% and the Nasdaq Composite lost 0.35% following Trump's remarks at the NATO summit in Ankara, Turkey.

The renewed tensions pushed investors toward defensive positioning after markets had increasingly priced in the possibility of de-escalation in the Middle East over recent weeks.

Oil prices climbed sharply, while technology and travel stocks came under pressure.

Investors are also awaiting the release of minutes from the Federal Reserve's June policy meeting later in the day for further clues on the outlook for US interest rates.

Oil surges as Middle East tensions intensify

Crude oil prices extended gains after Trump's comments signaled a breakdown in diplomatic efforts with Iran.

Brent crude futures rose more than 5% to around $78 per barrel, while US West Texas Intermediate crude climbed about 5% to nearly $74 per barrel.

The latest escalation follows what the United States described as strikes against Iran after attacks on three commercial vessels transiting the Strait of Hormuz.

The developments revived concerns over disruptions to energy supplies and renewed fears that higher oil prices could complicate the inflation outlook.

The move in crude boosted energy stocks in trading.

Chevron and Exxon Mobil gained more than 1%, while ConocoPhillips advanced around 1.7%.

Devon Energy, Occidental Petroleum, APA Corp and Diamondback Energy also traded higher as investors rotated into energy producers expected to benefit from stronger crude prices.

The renewed rise in oil also raised concerns that inflationary pressures could persist, potentially influencing the Federal Reserve's policy path.

Travel stocks lead market declines

Technology shares gained slightly following several weeks of volatility across AI-related stocks.

The iShares Semiconductor ETF gained about 0.4% in trading, while Micron Technology was up by roughly 0.42%, reversing recent weakness in memory-chip stocks.

Broadcom shares gained 2.3% after Apple reaffirmed plans to spend more than $30 billion under a chip supply agreement announced earlier this week.

Travel-related companies also weakened as rising fuel costs weighed on the sector.

United Airlines fell about 3.1% in trading, while Delta Air Lines and Southwest Airlines also declined.

Cruise operators Carnival, Royal Caribbean and Norwegian Cruise Line each traded lower as investors evaluated the potential impact of higher energy prices on operating costs and travel demand.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, climbed to its highest level in more than a week as market uncertainty increased.

Investors await Fed minutes

Beyond geopolitical developments, investors are focused on the release of minutes from the Federal Reserve's June policy meeting.

The minutes will provide additional details from Chair Kevin Warsh's first policy meeting after officials left interest rates unchanged while indicating further rate increases could remain possible if inflation pressures persist.

According to CME's FedWatch Tool, financial markets continue to price in at least one interest rate increase before the end of 2026.