USD Strengthens as Iran Retaliation Threats Trigger Risk-Off Selloff

The US dollar surged as a broad risk-off wave swept markets following Iran's Revolutionary Guard naming 18 American technology companies for retaliation, citing their involvement in defense contracts and AI-driven intelligence gathering. The S&P 500 erased nearly half its gains, falling from +110 points to just +62 points as equities came under heavy selling pressure. Safe-haven demand propelled the dollar higher against risk-sensitive currencies, with pairs like EUR/USD, GBP/USD, and AUD/USD all facing downside pressure. Companies including Palantir, Microsoft, and Google were specifically targeted, escalating geopolitical uncertainty in the Middle East. The development compounds existing tensions surrounding the US-Iran conflict, adding a layer of corporate risk to the broader geopolitical narrative. Traders should monitor further escalation signals, as retaliatory actions against major US tech firms could ripple through equity markets and amplify dollar strength. Near-term, the DXY index is likely to find support from continued safe-haven flows, while risk currencies may test lower support levels.