Stocks resumed their decline Thursday after a one-day respite as concerns over the Iran war flared up again withU.S. crude topping $80 per barrel.
TheDow Jones Industrial Averagedeclined 784.67 points, or 1.61%, to 47,954.74. TheS&P 500fell 0.56% to 6,830.71, while theNasdaq Compositedipped 0.26% to 22,748.99. The stock sell-off was led byBoeing,Caterpillarand other names that stand to lose the most if the global economy slows.
Oil prices jumped, withWest Texas Intermediate crude futuressurpassing $80 per barrel in the afternoon to hit its highest level since July 2024, after Iran said it hit an oil tanker with a missile. It settled up more than 8% at $81.01 a barrel. International benchmarkBrent crude futuressettled nearly 5% higher at $85.41 per barrel.
The moves in oil drove major market swings throughout the session. The 30-stock Dow fell 1,000 points at almost the very moment oil reached the $80-per-barrel threshold. The index was down more than 1,100 points, or about 2.4%, at its nadir. The S&P 500 and Nasdaq also traded near session lows after earlier moving just above the flatline at their highs of the day. They were each lower by around 1.4% at their lows.
Both WTI crude and Brent futures prices had stabilized in the prior trading day, which boosted the Dowmore than 200 pointson Wednesday. Still, WTI crude has advanced more than 20% this week, while Brent has risen almost 18%. Both are on pace for their biggest weekly gains since March 2022.
Iranian Foreign Minister Abbas Araghchi said Thursday that Iran is "not asking for a cease fire" from the U.S. and Israel, adding that "we don't see any reason why we should negotiate."
With increasing uncertainty surrounding the conflict, Sam Stovall of CFRA Research said that investors are now wondering if the U.S. bit off more than it can chew.
"Can [President Donald] Trump really escort all of the vessels through the [Strait of Hormuz]?" the chief investment strategist remarked. "What kind of liability are we going to be putting on ourselves, and how would that affect our debt levels? Investors are basically saying that whatever is happening now is not good."
Fears of disruption to regional oil and gas supplies had subsided after Trump said on Tuesday thatthe U.S. is preparing to provide risk insuranceand escorts to ships in the Persian Gulf in an effort to ensure traffic can move through the Strait of Hormuz.
To be sure, the White House would not provide a timeline for when the strait, which is responsible for roughly 20% of the world's oil supply, will be safe for oil tankers.
Source: Drudge Report
