US equity markets closed lower on Monday as investors reacted to President Donald Trump’s threat of retaliation against Iran following the deaths of three American soldiers.
The Dow Jones Industrial Average and broader indices faced selling pressure as the prospect of renewed military conflict in the Middle East weighed on sentiment.
Energy markets moved in the opposite direction, with Brent crude and WTI prices climbing as traders priced in the risk of supply disruptions.
The rally in oil reflects market concerns that a US-led airstrike or naval blockade could impact Iranian exports and regional shipping routes, echoing fears from previous escalations.
The development marks a sharp escalation in US-Iran tensions.
President Trump has previously threatened to order new airstrikes and potentially restart a naval blockade of Iranian ports, signaling a significant reversal in US policy toward Tehran.