* Indexes down: Dow 0.1%, S&P 500 0.3%, Nasdaq 0.5%

* Shutterstock ( SSTK ) plunges on scrapped Getty Images ( GETY ) merger

* Meta jumps after report on cloud business

(Updates after markets open)

By Niket Nishant and Avinash P

July 1 (Reuters) - Wall Street's main indexes fell on

Wednesday as unease surrounding U.S.-Iran tensions cast a shadow

on Middle East peace talks, setting a cautious tone for the

second half of the year.

Tehran said it would not meet with top U.S. envoys who flew

to the region following ​an outbreak of hostilities. Although a

source with direct knowledge of the talks as well as an Iranian

official said the U.S. and Iran held technical talks in Doha,

contrasting rhetoric suggested a breakthrough may prove to be

elusive.

Repeated false dawns have made the conflict difficult to

track, leading some investors to focus instead on the economy's

underlying pillars. The declines, however, indicated that the

Middle East war was difficult to ignore, especially given the

impact the region has on global energy markets.

At 10:01 a.m. ET, the Dow Jones Industrial Average

fell 65.31 points, or 0.11%, to 52,262.87, the S&P 500

shed 19.85 points, or 0.26%, to 7,479.82, and the Nasdaq

Composite lost 141.90 points, or 0.54%, to 26,073.29.

In the second quarter of 2026, the S&P 500 and the Nasdaq

Composite registered their best quarterly performances since

2020, while the Dow marked its best showing since 2022.

"I don't get the sense that there's a great deal of euphoria

out there at the moment. The mood is sanguine, but not

complacent," said Benjamin Jones, global head of research at

Invesco.

Investors are worried the U.S. Federal Reserve might need to

hike interest rates and keep them elevated to control inflation.

Traders expect the central bank to raise borrowing costs at

least once by the end of the year, according to data compiled by

LSEG.

The heavyweight information technology index fell

1.4%, leading losses on the benchmark index.

Meta Platforms' ( META ) shares jumped 8.4% after a report

said the Facebook parent is building a cloud business to sell

excess AI computing capacity. The broader S&P 500 communication

services index was up 2.3%.

Interest-rate uncertainty is also high because Kevin Warsh,

who took over as Federal Reserve chair in May, has launched a

review that could reshape the way the central bank communicates

with the public. In his first policy meeting as chair, he built

consensus ​around a policy statement that jettisoned any forward

guidance on the central bank's near-term actions.

Warsh reiterated this message when he spoke at a forum in

Portugal, joined by other central bank heads.

Separately, U.S. manufacturing activity slowed in June after

surging in the prior month, data from the Institute for Supply

Management showed.

Markets will now look for clues on the health of the labor

market on Thursday, when the nonfarm payrolls report for June is

due to be released.

Other movers included Shutterstock ( SSTK ), which plunged

nearly 31% after calling off its planned merger with Getty

Images ( GETY ).

Kroger ( KR ) fell 1% after the grocer announced it would

buy regional supermarket chain Giant Eagle in a $1.65 billion

deal.

Advancing issues outnumbered decliners by a 1.2-to-1 ratio

on the NYSE and by a 1.35-to-1 ratio on the Nasdaq.

Neither the S&P 500 nor the Nasdaq Composite posted any new

52-week highs or lows.