U.S. stock indices closed lower on Thursday as investors monitored the latest developments in U.S.-Iran relations. Reports of a potential revival of the "Freedom Plan" to escort commercial vessels through the Strait of Hormuz contributed to a rebound in international oil prices. The Trump administration is reportedly considering resuming the escort operation after Saudi Arabia and Kuwait lifted restrictions on U.S. military use of their bases and airspace. Earlier this week, President Trump had suspended the plan just two days after its launch, stating that he would wait to see whether an agreement with Iran could be finalized. The Pentagon previously described the operation as a defensive, targeted, and temporary mission aimed at protecting commercial shipping from Iranian attacks.
In market performance, the Dow Jones Industrial Average fell by 313.62 points, or 0.63%, to close at 49,596.97. The S&P 500 dropped 28.01 points, or 0.38%, ending at 7,337.11. The Nasdaq Composite declined by 32.75 points, or 0.13%, finishing at 25,806.20. Shares of ARM Holdings plunged more than 10%, while Tesla Motors gained 3%. Intel and Micron Technology each fell about 3%. The Nasdaq Golden Dragon China Index closed down 1.4%.
European markets also finished lower. Germany's DAX 30 fell 1.15%, the UK's FTSE 100 dropped 1.60%, and France's CAC 40 declined 1.17%. The Euro Stoxx 50, Spain's IBEX 35, and Italy's FTSE MIB also posted losses.
The U.S. dollar index edged up 0.05% to 98.063. In forex trading, the euro rose slightly against the dollar, while the British pound weakened. The yen and Swiss franc softened against the dollar, while the Canadian dollar and Swedish krona showed mixed movements.
Bitcoin fell below the $80,000 mark to $79,759, and Ethereum dropped more than 2.5% to $2,288.18.
In commodities, light crude oil for June delivery fell 0.28% to $94.81 per barrel, while Brent crude for July delivery dropped 1.19% to $100.06 per barrel.
Spot gold settled at $4,688.48 per ounce, and silver ended at $78.389 per ounce. Data from the People's Bank of China showed gold reserves increased by 260,000 ounces in April, marking the 18th consecutive month of growth.
In macroeconomic news, the U.S. Central Command reported that its naval vessels intercepted an unprovoked attack by Iranian forces while transiting the Strait of Hormuz. U.S. forces struck Iranian military facilities in self-defense but stated they had no intention of escalating the situation.
A U.S. trade court ruled that President Trump's latest 10% tariff measure was invalid due to a lack of legal basis. The decision followed a Supreme Court ruling in February that similar tariffs lacked clear authorization.
San Francisco Fed President Mary Daly emphasized that the wording of Fed statements is less important than actions, suggesting that policymakers should not overreact to energy price shocks. She indicated no dissent with recent policy decisions and noted that there is no sign yet of energy prices driving medium- or long-term inflation expectations.
Media reports indicated that Saudi Arabia and Kuwait have restored U.S. military access to bases and airspace, removing a key obstacle to restarting the "Freedom Plan." The operation may resume as early as this week.
In corporate news, Apple is reportedly in advanced testing stages for a new version of AirPods equipped with a camera, designed to integrate with AI capabilities. The device will use the camera to perceive the environment and assist Siri, though it will not capture photos or videos. The product's launch has been delayed due to postponements in the new Siri rollout, now expected in September.
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