(Updates with index/price moves and geopolitical news from the first paragraph.)
US equity indexes rose as technology topped sector charts while government bond yields and crude oil extended declines after the Treasury Department began a campaign to tighten sanctions against Iran.
The Nasdaq Composite advanced 0.4% to 26,090.8, the S&P 500 climbed 0.2% to 7,667.4 and the Dow Jones Industrial Average edged up 0.3% to 53,558.5. Energy and consumer staples led the decliners.
The Treasury is targeting aviation, shipping, technology, gold and digital assets such as cryptocurrency to choke off Iran's economy, CNN reported. The US is also threatening damaging new sanctions on countries that refuse to cut economic ties with Tehran.
Iran pledged to fight back against expanded US sanctions aimed at isolating its economy, expressing confidence major trading partners would resist the pressure campaign and saying that Washington was keen to revive talks, Reuters reported.
Hours after the US sanctioned dozens of Chinese entities and threatened to target an unspecified "major financial institution" for its dealings with Tehran, Beijing responded by saying its relationship with Iran "should not be disrupted or undermined," Bloomberg reported. China will take "all necessary measures" to safeguard its interests, Foreign Ministry spokesperson Lin Jian was cited as saying.
Meanwhile, Iran and Oman outlined a proposal to establish a temporary joint shipping lane and launch a demining effort in the Strait of Hormuz, the CNN news report said.
The front-month US West Texas Intermediate crude oil contract retreated 3.2% to $82.29 per barrel, and global benchmark North Sea Brent slumped 4% to $88.50 per barrel.
US Treasury yields remained lower in the final stretch of trading. The 30-year slumped 6.1 basis points to 5.17%, the 10-year dropped 6.7 basis points to 4.64% and the two-year retreated 4.5 basis points to 4.19%.