U.S. stocks fall on Middle East tensions, Dow drops more than 400 points

2026-06-03

Middle East tensions intensify

The Dow Jones Industrial Average opened lower for the first time in six sessions on the U.S. stock market on the 3rd, and as of 9:35 a.m. was down $152.54 at 51,155.25. At one point, the decline topped 400 points. Crude futures rose on uncertainty surrounding the Middle East situation, prompting selling in equities.

Higher oil and rising rates

Reuters reported on the 3rd that Iran had attacked civilian facilities including an airport in Kuwait. The airport terminal was said to have been damaged. Iran also attacked Bahrain, but the strike appeared to have been intercepted. On the view that talks to end fighting between the U.S. and Iran are struggling, U.S. crude futures saw front-month July WTI trade around $95 a barrel, above the previous day's settlement of $93.76.

In the May U.S. national employment report released by private payrolls company ADP on the 3rd, nonfarm employment excluding government jobs rose by 122,000 from the previous month. That topped market expectations for an 110,000 increase and reinforced views that the Federal Reserve will keep policy rates unchanged for the time being. Along with higher oil prices, indicators showing the resilience of the U.S. labor market pushed up long-term yields in the U.S. bond market, adding to selling pressure on stocks as investors focused on their high valuations.

Moves in individual stocks

Among Dow components, IBM, Salesforce and Microsoft fell. Nvidia and Cisco Systems also declined. On the other hand, Sherwin-Williams rose. The company on the 3rd said it had abandoned a planned acquisition of Akzo Nobel in the Netherlands, which it had been considering jointly with Nippon Paint Holdings, drawing market attention. Caterpillar and Walmart also gained.

Nasdaq trades flat

The Nasdaq Composite Index, which has a heavy weighting of technology stocks, opened little changed. Buying continued in Marvell Technology, a semiconductor company that surged sharply the previous day. By contrast, Palo Alto Networks, a cybersecurity company, fell. Although its earnings for the February-April quarter released on the evening of the 2nd topped market expectations for sales and other items, the stock came under selling pressure.

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