US equity indexes fell as Treasury yields surged and bets favoring higher interest rates jumped amid President Donald Trump's threat to Iran that strikes will resume if Tehran fails to agree on an acceptable deal in talks with Gulf nations.
The Nasdaq Composite fell 0.8% to 25,883.6, with the S&P 500 down 0.6% to 7,358.2 and the Dow Jones Industrial Average lower by 0.5% to 49,405.5 ahead of the close on Tuesday.
President Trump warned strikes would resume against Iran as part of a push for a deal to end the war, Bloomberg reported. "I hope we don't have to do the war, but we may have to give them another big hit," Trump told reporters on Tuesday, referring to talks between the Gulf nations and Tehran to agree on a framework for resuming peace negotiations.
When asked how long he would wait for the outcome of Middle East talks, he said: "Well, I mean, I'm saying two or three days, maybe Friday, Saturday, Sunday. Something maybe early next week - a limited period of time."
West Texas Intermediate crude oil futures fell 0.8% to $107.77, and Brent crude futures declined 0.6% to $111.40.
Most US Treasury yields rose. The 30-year rate advanced 2.8 basis points to 5.18%, the strongest level since 2006. The 10-year climbed four basis points to 4.67%, the highest since January 2025.