US Equity Indexes Drop as Fading Iran Ceasefire Optimism Pushes Crude Oil, Treasury Yields Higher

01:23 PM EDT, 03/26/2026 (MT Newswires) -- US equity indexes fell midday Thursday after President Donald Trump's warning that Iran "get serious" in working out a peace deal with Washington sent crude oil futures and government bond yields higher.

The Nasdaq Composite dropped 1.3% to 21,654.1, with the S&P 500 down 0.9% to 6,530.8, and the Dow Jones Industrial Average 0.6% lower at 46,145.7. Communication services, technology, and industrials were among the steepest decliners intraday. Energy led the gainers.

Iran reportedly confirmed it is reviewing a US 15-point proposal but rejected immediate talks. The foreign ministry stated that conflict will only end on Tehran's terms, demanding war reparations and legally recognized sovereignty over the Strait of Hormuz before any formal negotiations with the US begin.

Trump called upon Iran to work on a ceasefire deal with the US, according to a Thursday post on Truth Social. "They better get serious soon, before it is too late, because once that happens, there is NO TURNING BACK, and it won't be pretty!"

Trump's post followed Wednesday's comments from White House Press Secretary Karoline Leavitt that the president will hit harder if Tehran ignores its military defeat.

The CBOE Volatility Index, also known as a fear gauge, jumped 6.7% to 27.04.

"Based on some data, Iran's enemies, with the support of one of the regional countries, are preparing to occupy one of the Iranian islands," Iran's parliament speaker, Mohammad Bagher Ghalibaf, said in a Wednesday social media post on X, formerly known as Twitter. "All enemy movements are under the full surveillance of our armed forces."

West Texas Intermediate crude oil futures jumped 4.1% to $94.11 intraday.

"Conflicting US-Iran signals on a potential ceasefire keep the geopolitical risk premium elevated," ING analysts said in a note. "Middle East disruptions continue to ripple through energy markets, with gas prices still more than 60% higher since the conflict began."

Meanwhile, a joint statement from the United Arab Emirates, the State of Kuwait, the Kingdom of Bahrain, the Kingdom of Saudi Arabia, the State of Qatar, and the Hashemite Kingdom of Jordan reaffirmed "our full and inherent right to self-defence against these criminal attacks," according to a Thursday report from Gulf News.

Most US Treasury yields advanced, with the 10-year up 5.2 basis points to 4.38% and the two-year higher by 5.8 basis points to 3.94%.

In precious metals, gold futures dropped 2.2% to $4,448.1 and silver futures slumped 4.1% to $69.03.

In economic news, US initial jobless claims rose to 210,000 in the week ended March 21 from 205,000 in the previous week, according to a US Labor Department report, as expected in a survey of analysts compiled by Bloomberg.

"While labor market conditions have stabilized and layoffs remain low, the US/Israel war with Iran has made the labor market more vulnerable," Oxford Economics Lead US Economist Nancy Vanden Houten said in remarks emailed to MT Newswires.

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