NEW YORK, New York - U.S. stock markets closed lower on Thursday, as investor sentiment was rattled by devastating attacks on oil and gas infrastructure in Qatar and Iran, reigniting fears of broader energy supply disruptions and regional instability.

The strikes, which targeted critical facilities in the two major energy-producing nations, sent shockwaves through global markets. While energy prices initially spiked on the news, equity traders grew concerned about the potential for a protracted conflict that could stifle economic growth and squeeze corporate margins with higher fuel costs.

On Wall Street, the three major indices all finished in negative territory. The Standard and Poor's 500 slipped 18.20 points, or 0.27 percent, to close at 6,606.50. The benchmark index managed to trim some of its steepest intraday losses but remained under pressure as investors rotated away from riskier assets.

The Dow Jones Industrial Average fared slightly worse, dropping 203.23 points, or 0.44 percent, to settle at 46,021.92. Blue-chip stocks with exposure to global supply chains were particularly volatile as traders assessed the potential fallout from the Middle East escalation.

The tech-heavy NASDAQ Composite also saw declines, falling 61.73 points, or 0.28 percent, to end the session at 22,090.69. Despite the down day, the index held up relatively better than its peers, supported by safe-haven flows into some of the larger mega-cap technology names.

"The situation in Qatar and Iran introduces a dangerous new variable," said one market strategist. "While oil facilities being hit typically means higher prices for producers, the market is now pricing in the worst-case scenario: a regional war that disrupts shipping lanes and invites broader involvement. That is a net negative for global equities."

Investors are now bracing for a potentially volatile stretch ahead, with all eyes remaining on diplomatic efforts and any further military developments in the Gulf region.

U.S. Dollar Dips as Euro and Pound Surge in Thursday Forex Trading

The U.S. dollar experienced a mixed but broadly softer session on Thursday, losing considerable ground against major counterparts as shifting interest rate expectations and geopolitical risk sentiment drove significant moves in the foreign exchange market.

The most notable action was seen in the euro and sterling, both of which posted strong gains against the greenback. The Euro / US dollar (EURUSD) pair climbed sharply, adding 1.11 percent to trade at 1.15788. The move suggests growing confidence in the Eurozone's economic resilience relative to the United States, despite ongoing global uncertainties.

Sterling also shone brightly. The British pound / U.S. dollar (GBPUSD) rate surged by 1.29 percent, last changing hands at 1.34268, as the Bank of England left interest rates unchanged. Analysts pointed to better-than-expected UK economic data and a hawkish tilt from Bank of England commentary as key drivers behind the pound's strength.

The commodity-linked currencies of the Pacific region also had a strong session. The New Zealand dollar / US dollar (NZDUSD) was one of the top performers, soaring 1.30 percent to trade at 0.5871. It was closely followed by the Australian dollar / US dollar (AUDUSD) , which rose by 0.84 percent to hit 0.7081. These moves were supported by a rebound in risk appetite for some regional assets and firmer commodity prices.

In contrast, the Japanese yen strengthened notably against the dollar, bucking the trend of broad dollar weakness in a specific safe-haven move. The US dollar / Japanese yen (USDJPY) pair fell sharply, dropping 1.34 percent to 157.664, as investors sought the Japanese currency amid the ongoing geopolitical tensions in the Middle East.

The US dollar / Swiss franc (USDCHF) also declined, slipping 0.58 percent to trade at 0.7885, as the Swissie benefited from its own safe-haven appeal.

The lone flat spot in an otherwise volatile session was the US dollar / Canadian dollar (USDCAD) pair, which remained virtually unchanged. The pair edged up by a marginal 0.04 percent to 1.37363, as the pressure of a softer US dollar was almost perfectly offset by falling oil prices, which typically weigh on the loonie.

Market participants will now turn their attention to upcoming central bank speeches and inflation data for further clues on the next major directional move for the world's major currencies.

Global Equity Markets Plunge on Escalating Middle East Energy Attacks

Global financial markets suffered a severe downturn on Thursday, with major indices posting steep losses as investors reacted to the devastating attacks by Israel and Iran on key oil and gas facilities in the Middle East. The escalating conflict has ignited fears of a sustained disruption to global energy supplies, sending shockwaves through trading floors from London to Tokyo.

The attacks, which targeted critical infrastructure in the region, have introduced a new level of geopolitical risk, prompting a mass exodus from equities. Analysts noted that the primary driver of the sell-off was the uncertainty surrounding energy prices and the potential for a wider regional war that could choke off oil and natural gas flows.

The selling pressure was more pronounced in Canada, whose economy is more heavily weighted toward the energy sector. The S&P/TSX Composite index in Toronto tumbled 457.69 points, or 1.42 percent, closing at 31,854.98. The index was dragged lower by major oil sands producers and pipeline companies, which, despite the potential for higher crude prices, faced selling pressure over fears that a wider war could eventually lead to demand destruction or targeted retaliation against energy assets.

In London, the FTSE 100 closed sharply lower, tumbling 241.79 points, or 2.35 percent, to settle at 10,063.50. The index, heavily weighted with energy stocks that typically benefit from rising oil prices, was dragged down by broader fears of a global economic slowdown.

European markets were hit just as hard. Germany's DAX P plummeted by 662.69 points, a loss of 2.82 percent, ending the session at 22,839.56. France's CAC 40 dropped 162.01 points, or 2.03 percent, to close at 7,807.87. The pan-European EURO STOXX 50 I also saw heavy losses, falling 123.02 points (2.14 percent) to 5,613.83, while the broader Euronext 100 Index declined by 30.76 points, or 1.74 percent, finishing at 1,732.11. Belgium's BEL 20 mirrored the regional trend, sliding 124.31 points to 5,004.77, a decrease of 2.42 percent.

The selling pressure was not confined to Europe.

In Asia, Hong Kong's HANG SENG INDEX fell sharply by 524.84 points, or 2.02 percent, closing at 25,500.58. Japan's Nikkei 225 was among the worst performers, suffering a dramatic loss of 1,866.87 points, or 3.38 percent, to end at 53,372.53.

Australia's S&P/ASX 200 shed 142.80 points (1.65 percent) to finish at 8,497.80, while the broader ALL ORDINARIES index dropped 157.00 points, or 1.77 percent, to 8,690.70. In South Korea, the KOSPI Composite Index fell 161.81 points, a decline of 2.73 percent, to close at 5,763.22. Taiwan's TWSE Capitalization Weighted Stock Index also saw significant red, dropping 658.90 points, or 1.92 percent, to 33,689.68. India's S&P BSE SENSEX took a heavy blow, plunging 2,496.89 points, or 3.26 percent, to settle at 74,207.24. New Zealand's S&P/NZX 50 INDEX GROSS declined by 263.99 points (1.98 percent) to 13,051.61.

However, the session saw a few outliers that bucked the negative trend. Indonesia's IDX COMPOSITE managed to post a gain, rising 84.55 points, or 1.20 percent, to close at 7,106.84. Israel's TA-125 index was virtually flat, eking out a gain of just 2.03 points, or 0.05 percent, to finish at 4,231.24. In a more pronounced divergence, Egypt's EGX 30 Price Return Index surged, adding 1,557.40 points, a robust gain of 3.38 percent, to close at 47,612.00.

In China, the SSE Composite Index fell by 56.43 points, or 1.39 percent, ending the day at 4,006.55. Malaysia's FTSE Bursa Malaysia KLCI saw a modest decline of 9.10 points, or 0.53 percent, to 1,720.71. The FTSE/JSE Top 40 USD Net TRI Index in South Africa was not immune to the global sentiment, dropping 226.00 points, or 3.34 percent, to 6,540.57.

Market strategists suggest that volatility is likely to persist as long as the conflict shows no signs of de-escalation, with the energy sector remaining the primary focal point for traders.

(This report incorporates quotes retrieved with the assistance of artificial intelligence).

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