US stock markets declined on Wednesday after President Trump announced the termination of the memorandum of understanding between the US and Iran, triggering an immediate spike in global oil prices amid escalated Middle East conflict fears.
The Dow Jones Industrial Average dropped 1.2 percent, shedding more than 600 points, while the S&P 500 slipped 0.6 percent.
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The tech-heavy Nasdaq Composite decreased by 0.5 percent following the geopolitical escalation, according to market data reported by Yahoo Finance.
Military Action and Diplomatic Breakdown
Equity markets reacted negatively after American forces launched multiple powerful strikes against Iran late Tuesday.
The military action followed prior hostilities involving attacks on three commercial vessels traveling through the Strait of Hormuz.
Speaking in Ankara prior to a NATO summit, President Trump confirmed the collapse of the diplomatic agreement due to the renewed military friction.
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"As far as I'm concerned, it's just a waste of time dealing with them," said President Trump, referring to Iran.
Energy sectors experienced heavy volatility after the US Treasury Department revoked a critical license that previously permitted global Iranian oil exports.
West Texas Intermediate crude surged over 5 percent to trade briefly above $74 a barrel, while Brent crude held near $78 a barrel.
Market attention is also focusing on the scheduled Wednesday afternoon release of the Federal Reserve's June meeting minutes.
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Investors are seeking policy insights following the central bank's recent decision to hold interest rates steady during its inaugural session under Chairman Kevin Warsh.
