Israeli and Palestinian officials confirmed on Tuesday that all hostages held in Gaza have been released after a negotiated transfer, ending one of the most fraught humanitarian episodes of the conflict. The releases were brokered by mediators from Qatar and Egypt, who, along with international aid workers, oversaw the movement of civilians through Rafah and into medical and processing facilities in Egypt, officials said.

“Today, these families are whole again,” Prime Minister Benjamin Netanyahu said in a brief statement, calling the outcome “a relief for Israel and for decency.” A Hamas spokesman acknowledged the releases in a dispatch to regional media, framing them as the result of a negotiated settlement and pressure from Palestinian authorities and regional intermediaries. Red Crescent and United Nations representatives at the crossing said they were working to provide immediate medical care and reunification services.

The humanitarian relief did not, however, translate into calm in financial markets. U.S. stocks tumbled sharply after a new statement from former President Donald Trump late Monday suggested he was prepared to consider extraordinary measures — including the possible use of the Insurrection Act and broader military involvement in U.S. cities — to enforce order amid domestic unrest. The S&P 500 fell about 1.6 percent in early trading, the Dow Jones Industrial Average dropped roughly 420 points, and the Nasdaq declined nearly 2 percent, according to market data.

Traders and analysts said the sell-off reflected fears that incendiary rhetoric and talk of deploying the military domestically would heighten political risk in an already polarized election environment and complicate the path out of a partial federal shutdown that has slowed air traffic and furloughed thousands of workers. “Markets hate uncertainty, and the prospect of constitutional confrontation or the use of armed forces at home raises risks for the economy and institutions,” said a market strategist at a major investment firm.

Legal scholars and military leaders quickly pushed back against the notion of deploying troops on U.S. streets, cautioning that the Insurrection Act has strict conditions and that routine military involvement in domestic policing could erode civil-military norms. Congressional leaders from both parties called for de-escalation and for clarity about any steps that would implicate the armed services.

The convergence of foreign and domestic crises has created a particular institutional strain. The hostage releases, while a diplomatic success, highlight the fragile balance of regional negotiations and the continuing need for humanitarian corridors and accountability for detainees. At home, the federal shutdown has continued to ripple through transportation and services; aviation industry officials reported fewer flights and longer delays as safety and staffing reviews proceed.

With an election cycle intensifying and the Supreme Court beginning what advocates call a consequential term, the interplay of foreign policy developments and domestic political maneuvers is expected to shape voter mobilization and civic engagement in the months ahead. For now, markets, militaries and families are left to navigate a brief window of relief in Gaza shadowed by renewed domestic volatility.