Wall Street reverses as Iran tensions surge ahead of NFP

U.S. stocks rose to intraday highs early in the session but reversed and finished lower after reports that Iran fired missiles at U.S. Navy destroyers and state reports described anti-aircraft activity and explosions over Tehran. The Dow Jones Industrial Average fell more than 300 points and closed below the 50,000 level ahead of Friday’s U.S. Nonfarm Payrolls report.

Markets had opened higher on hopes for diplomatic progress before sentiment turned negative by midday. The S&P 500 and Nasdaq reached intraday peaks near 7,385 and 28,850, respectively, then lost momentum and ended the day in negative territory.

The selloff accelerated when details emerged indicating the reported missile strikes were apparently in response to recent U.S. strikes on Iranian tankers. A U.S. official denied reports that the military was preparing to restart “Operation Freedom,” the mission to reopen the Strait of Hormuz by force.

Commodity and currency markets moved sharply alongside equities. West Texas Intermediate crude fell to roughly $90 per barrel before reversing around 10:30 a.m. ET and trading back toward $95. The U.S. dollar strengthened late in the session; the dollar index rose above 98.00 after forming a technical triple bottom and finished the day as the strongest major currency.

Price swings and wider trading ranges were visible across markets as accounts from the region diverged. Traders will focus on the U.S. Nonfarm Payrolls release at 8:30 a.m. ET and Canadian employment data for fresh direction if there are no further developments in the Gulf.

Past headlines about strikes, naval activity and potential blockades in the Persian Gulf have coincided with moves in oil prices and safe-haven flows, and monthly payroll data often triggers larger market reactions when geopolitical uncertainty is present.