In this paper, we focus on a class of optimal eighth-order iterative methods, initially proposed by Sharma et al., whose second step can choose any fourth-order iterative method. By selecting the first two steps as an optimal fourth-order iterative method, we derive an optimal eighth-order one-parameter iterative method, which can solve nonlinear systems. Employing fractal theory, we investigate the dynamic behavior of rational operators associated with the iterative method through the Scaling theorem and Möbius transformation. Subsequently, we conduct a comprehensive study of the chaotic dynamics and stability of the iterative method. Our analysis involves the examination of strange fixed points and their stability, critical points, and the parameter spaces generated on the complex plane with critical points as initial points. We utilize these findings to intuitively select parameter values from the figures. Furthermore, we generate dynamical planes for the selected parameter values and ultimately determine the range of unstable parameter values, thus obtaining the range of stable parameter values. The bifurcation diagram shows the influence of parameter selection on the iteration sequence. In addition, by drawing attractive basins, it can be seen that this iterative method is superior to the same-order iterative method in terms of convergence speed and average iterations. Finally, the matrix sign function, nonlinear equation and nonlinear system are solved by this iterative method, which shows the applicability of this iterative method.