Wall Street retreats as US-Iran tensions and economic data dent sentiment; Dow Jones dips 176 points

US equities traded lower on Thursday as investor sentiment turned sombre over rising war clouds in the West Asian region, corporate earnings and shifting monetary expectations. The S&P 500 and the Dow Jones Industrial Average both slipped approximately 0.3%, surrendering gains from the previous session’s rally. The tech-heavy Nasdaq Composite faced steeper pressure, falling 0.4%.Driving the retreat was a sharp spike in energy costs. Crude oil prices extended their most aggressive climb since October, fueled by escalating fears of a potential US military confrontation with Iran.

International benchmark Brent crude surged past $71 per barrel, while West Texas Intermediate (WTI) hovered near $66. As investors sought safety amid the geopolitical noise, Gold reclaimed a position above $5,000 an ounce.

PRESIDENT TRUMP: We settled 8 wars and I think a ninth is to come ???? pic.twitter.com/z2NflGrzLv

— Department of State (@StateDept) February 19, 2026

The bond market reflected growing unease, with US Treasury on track for their longest losing streak in a month. Rising oil prices have reignited concerns about “sticky” inflation, complicating the Federal Reserve’s next moves.

Minutes from the Fed’s January policy meeting, released earlier this week, highlighted disagreements. While some officials advocate for continued rate cuts to protect the labour market, others expressed deep concern that price pressures have not sufficiently cooled, leading to a “deep divide” over whether to pause or proceed with further easing.

On the corporate front, Walmart reported quarterly results that technically beat analyst estimates. However, the retail giant’s stock remained under scrutiny after management issued a cautious outlook for 2026, citing persistent economic hurdles and shifting consumer behaviour.

Adding to the day’s data-heavy slate, the Commerce Department reported a significant widening of the US trade deficit, which jumped over 30% in December to $70.3 billion. The data has come despite the recent White House assertions that trade imbalances were shrinking.