NEW YORK (AP) — Stocks are falling sharply on Wall Street Thursday, including a 1,000-point slump for the Dow Jones Industrial Average, as oil prices rise further because of the war with Iran.

The S&P 500 sank 1.4% in afternoon trading, coming off a frenetic start to the week that saw financial markets swerve sharply, sometimes hour by hour. The Dow tumbled 1,052 points, or 2.2%, as of 1:27 p.m. Eastern time, and the Nasdaq composite was 1.3% lower.

Financial markets are again following the cue of oil prices. They're cranking up the pressure because of worries that a long-term spike could exhaust households’ ability to spend, grind down the global economy and push interest rates higher.

A barrel of Brent crude, the international standard, rose 4.2% to $84.75 That’s up from close to $70 late last week. A barrel of benchmark U.S. crude climbed 6.9% to $79.80.

Oil prices rose after Iran launched a new wave of attacks against Israel, American bases and countries around the region. The war's escalations are raising worries about how long disruptions will last for the production and transport of oil and natural gas in the region.

Prices at U.S. gasoline pumps have already jumped because of them. The average price for a gallon is $3.25, up 9% from $2.98 a week ago, according to auto club AAA.

To be sure, the U.S. stock market has a history of bouncing back relatively quickly following conflicts in the Middle East and elsewhere. That has many professional investors suggesting patience and riding through the market’s swings.

“While further escalation remains a risk, we think the more likely outcome is an increase in market risk aversion that likely lasts only a short time until investors can see a winding down of hostilities,” according to Scott Wren, senior global market strategist at Wells Fargo Investment Institute.

But if oil prices spike, like to $100 per barrel, and stay there, it could be too much for the global economy to withstand. Uncertainty about that has caused this week’s sharp swings, and much will depend on what happens with the Strait of Hormuz. Roughly a fifth of the world’s oil typically sails through the narrow waterway off Iran's coast.

Stocks of retailers fell to some of the U.S. market's worst losses on Thursday. High gasoline prices mean their customers would have less to spend on other things.

Source: WPLG