The Dow Jones Industrial Average tumbled by more than 1,000 points as escalating conflict involving Iran rattled financial markets and raised concerns about the global economic outlook.
Investors reacted sharply to the widening Middle East conflict, which has fueled fears of disruptions to global energy supplies and higher inflation. At one point during trading, the Dow dropped around 1,052 points, or roughly 2.2%, while other major U.S. indexes also declined. The S&P 500 fell about 1.4%, and the Nasdaq Composite slipped 1.3%.
The market selloff was largely driven by a sharp rise in energy prices as tensions intensified in the Middle East. Oil markets surged amid fears that supply routes could be disrupted, particularly around the strategic Strait of Hormuz, a critical passage through which roughly one-fifth of the world’s oil supply passes.
Brent crude prices jumped more than 4% to around $84.75 per barrel, while U.S. crude rose nearly 7% to about $79.80 per barrel, increasing worries that energy costs could drive inflation higher worldwide.
Higher fuel prices quickly affected several sectors of the stock market. Airline and travel companies experienced some of the steepest losses as investors anticipated rising operating costs and possible travel disruptions. Retail and consumer-focused companies also dropped as investors worried that higher gasoline prices could reduce consumer spending.
Meanwhile, market volatility increased as investors tried to gauge how long the conflict might last and whether it could spread beyond the region. Analysts say prolonged instability could delay expected interest-rate cuts from the Federal Reserve because rising oil prices could keep inflation elevated.
Despite the sharp decline, some analysts say markets could stabilize if energy supply routes remain open and geopolitical tensions ease in the coming weeks.
