The Dow plummeted 769.83 points (1.8%) to 42,197.79, the Nasdaq plunged 255.66 points (1.3%) to 19,406.83 and the S&P 500 tumbled 68.29 points (1.1%) to 5,976.97.

Israeli airstrikes on Iran's nuclear and missile sites killed three senior military leaders, prompting Iran to retaliate with over 100 drones aimed at Israeli territory. The escalation has sparked fears of a broader conflict, pushing crude oil prices higher due to supply concerns. In response, former President Donald Trump urged Iran on Truth Social to strike a nuclear deal before the violence worsens. He warned of greater destruction ahead, calling for an immediate end to the bloodshed.

University of Michigan published a report showing a substantial improvement by consumer sentiment in the month of June. The University of Michigan said its consumer sentiment index surged to 60.5 in June after holding at 52.2 in May.

Airline stocks turned in some of the market's worst performances on the day, dragging the NYSE Arca Airline Index down by 4.3%. Computer hardware and semiconductor stocks were substantially weak, with the NYSE Arca Computer Hardware and Philadelphia Semiconductor Index plunging by 2.7% and 2.6%. Housing, networking and financial stocks also saw considerable weakness while energy and gold stocks bucked the downtrend.

Asia-Pacific stocks moved mostly lower. Japan's Nikkei 225 Index slid by 0.9%, while China's Shanghai Composite Index fell by 0.8%. The major European markets moved downwards while the U.K.'s FTSE 100 Index decreased by 0.4%, the French CAC 40 Index and the German DAX Index slumped by 1% and 1.1%.

In the bond market, treasuries gave back ground after moving notably higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note which moves opposite of its price, jumped 6.7 bps to 4.42%.

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