NEW YORK, New York - U.,S. stocks closed lower Tuesday as President Donald Trump hinted the United States may join Israel in its attacks on Iran. The president warned that the U.S. and presumably Israel know where Iran's Supreme Leader Ayatollah Ali  Khamenei is "hiding," but says he is safe "for now." Mr Trump also demanded of Iran, an "unconditional surrender."

"He is an easy target, but is safe there - We are not going to take him out, at least not for now," the president posted on Truth Social in reference to the ayatollah.

The tough talk, and the spectre of another Iraq unsettled financial markets. The Iraq War was planned, implemented and prosecuted on the basis Iraq had weapons of mass destruction, a claim found to be false when after invading Iraq, no such weapons were found.

Israel for decades, particularly Prime Minister Benjamin Netanyahu has been crying wolf over suppoed nuclear weapons in Iran, however U.S. intelligence as recently as March this year concluded no such weapons exist or are planned in Iran. Nonetheless G7 leaders in Canada on Monday, prior to Mr Trump's departure agreed on a joint statement declaring Israel has the right to defend itself, without any reference to Iran having the same. It was Iran that was attacked on Friday, in a surprise, unprovoked, pre-emptive series of strikes which decapitated the Iranian military leadership and assassinated an initial nine nuclear scientists.

Financial markets had largely ignored the breakout of hostilities until Tuesday when stocks fell, gold rose, bond prices dived, and the U.S. dollar surged. Concern over disruption to international shipping also spiked after Houthi official Mohammed al-Bukhaiti vowed the Houthi rebels will come to the aid of any Arab or Muslim nation under attack.

"We will intervene to support Tehran against Zionist aggressions as we supported our brothers in Gaza," al-Bukhaiti said in a statement Tuesday.

U.S. Market Performance

• Standard and Poors 500 (^GSPC): Fell 50.39 points (0.84 percent) to close at 5,982.72, marking its steepest one-day drop in three weeks. Trading volume reached 2.784 billion shares.

• Dow Jones Industrial Average (^DJI): Declined 299.29 points (0.70 percent) to 42,215.80, with 414.382 million shares traded.

• NASDAQ Composite (^IXIC): Underperformed, dropping 180.12 points (0.91 percent) to 19,521.09 on heavy volume of 7.662 billion shares.

U.S. Dollar Strengthens Against Major Currencies as Euro and Pound Slide Monday

The U.S. dollar rallied against most major currencies in Tuesday's foreign exchange trading, with the euro and British pound leading losses amid shifting economic expectations.

Key Moves

• EUR/USD fell sharply to 1.1485, down 0.64 percent, as traders weighed weaker Eurozone economic data.

• GBP/USD tumbled 1.00 percent Monday to 1.3433, its biggest daily drop in weeks, following dovish Bank of England signals.

• USD/JPY rose 0.39 percent to 145.26, as the Bank of Japan said it would slow cuts to government bond purchases from April next year, while it  left the benchmark rate at 0.5 percent unchanged, as expected..

• USD/CAD climbed 0.52 percent to 1.3640, supported by falling oil prices.

Commodity Currencies Under Pressure

The Australian dollar (AUD/USD) dropped 0.75 percent on Monday to 0.6473, while the New Zealand dollar (NZD/USD) slid 0.77 percent to 0.6012, both hurt by risk-off sentiment.

Swiss Franc Weakens

The U.S. dollar gained 0.41 percent against the Swiss franc (USD/CHF), trading at 0.8165, as safe-haven demand shifted to the dollar.

Global Markets Close Mixed on Tuesday as Major Indices Show Varied Performance

Global stock markets ended Tuesday's trading session with mixed results, as key indices across Europe, Asia, and the Pacific region posted divergent movements.

Canadian Market 

The S&P/TSX Composite (^GSPTSE) showed relative resilience, edging down just 27.22 points (0.10 percent) to 26,541.39, with 265.582 million shares changing hands.

UK and Europe

The FTSE 100 (^FTSE) in London dipped by 41.19 points, or 0.46 percent, closing at 8,834.03.

Meanwhile, in Germany' on Monday the DAX (^GDAXI) saw a steeper decline, falling 264.47 points, or 1.12 percent, to settle at 23,434.65.

France's CAC 40 (^FCHI) dropped 58.51 points, or 0.76 percent, ending at 7,683.73.

The broader Euro Stoxx 50 (^STOXX50E) retreated 50.89 points, or 0.95 percent, closing at 5,288.68, while in Belgium on Monday the BEL 20 (^BFX) slipped 43.03 points, or 0.96 percent, to 4,438.57.

Asia and Pacific

In Asia, Hong Kong's Hang Seng Index (^HSI) edged down 80.69 points, or 0.34 percent, finishing at 23,980.30. Conversely, in Singapore on Monday, the STI Index (^STI) gained 22.18 points, or 0.57 percent, closing at 3,930.64.

Japan's Nikkei 225 (^N225) gained 225.41 points, or 0.59 percent, ending at 38,536.74, while in China on Monday, the Shanghai Composite (000001.SS) dipped marginally by 1.32 points, or 0.04 percent, to 3,387.40.

Australia's S&P/ASX 200 (^AXJO) dipped slightly by 7.10 points, or 0.08 percent, settling at 8,541.30, while the Australian All Ordinaries (^AORD) slipped 3.90 points, or 0.04 percent, to 8,771.10.

India's S&P BSE Sensex (^BSESN) declined 212.85 points, or 0.26 percent, ending at 81,583.30, while in Indonesia the IDX Composite (^JKSE) rose 38.26 points, or 0.54 percent, to 7,155.85.

Malaysia's KLSE (^KLSE) fell 8.35 points, or 0.55 percent, closing at 1,511.64, and in New Zealand Monday, the S&P/NZX 50 (^NZ50) dropped 50.78 points, or 0.40 percent, to 12,639.35.

South Korea's KOSPI (^KS11) inched up 3.64 points, or 0.12 percent, to 2,950.30, while in Taiwan the TWSE Index (^TWII) climbed 161.69 points, or 0.73 percent, to 22,211.59.

Middle East & Africa

Israel's TA-125 (^TA125.TA) rose 15.26 points, or 0.55 percent, closing at 2,802.42, while in Egypt on Monday, the EGX 30 (^CASE30) dropped sharply by 316.40 points, or 1.02 percent, to 30,726.00

South Africa's JSE Top 40 (^JN0U.JO) declined 57.22 points, or 1.08 percent, closing on Monday at 5,221.01.

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