U.S. stock markets closed sharply lower Thursday as oil prices jumped on growing concerns about global supply disruptions linked to the escalating Iran conflict.
The Nasdaq Composite fell 1.8%, the Dow Jones Industrial Average dropped 1.6%—losing 739 points—and the S&P 500 declined 1.5%.
Energy markets drove much of the volatility. West Texas Intermediate surged more than 10% to $96.50 a barrel, while Brent Crude climbed above $100 for the first time since August 2022 after warnings of potential supply disruptions.
The International Energy Agency warned the Iran conflict could trigger the largest oil supply disruption in history, cutting its 2026 global supply growth forecast to 1.1 million barrels per day, sharply lower from the previous 2.4 million barrels per day estimate.
Geopolitical tensions intensified after Iran’s leadership suggested the Strait of Hormuz—a key global oil transit route—should remain closed to pressure opponents.
Meanwhile, the 10-year U.S. Treasury yield rose to 4.26%, increasing borrowing costs across the economy.
In other markets:
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Gold slipped 1.5% to $5,100 per ounce
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Silver fell nearly 1% to $84.70
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The U.S. Dollar Index rose 0.5% to 99.71
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Bitcoin traded around $70,400, slightly lower
Tech stocks also came under pressure, with all the Magnificent Seven declining. Tesla led losses, falling more than 3%.
In corporate news, Honda Motor shares dropped over 5% after the company warned it could face ¥2.5 trillion ($15.75 billion) in EV-related expenses and now expects a full-year net loss.
Earnings reactions were mixed:
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Petco Health & Wellness surged 35%
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Dick's Sporting Goods edged higher
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UiPath fell 8%
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Dollar General dropped 6%
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Adobe slipped ahead of its earnings report
Analysts say markets remain cautious as energy supply risks and geopolitical tensions continue to shape investor sentiment.
Frequently Asked Questions
Why did U.S. stock markets fall sharply?
Stocks declined mainly because oil prices surged amid fears of global supply disruptions linked to the Iran conflict, increasing concerns about inflation and economic uncertainty.
Why are oil prices rising so fast?
Oil prices jumped after warnings that the conflict could disrupt global supply and threats to close the Strait of Hormuz, one of the world’s most important oil transport routes.
What did the International Energy Agency say about oil supply?
The International Energy Agency warned the conflict could create the largest supply disruption in the history of the oil market and lowered its 2026 supply growth forecast significantly.
Why did gold prices fall despite geopolitical tensions?
Even though tensions usually support safe-haven assets, gold slipped as the U.S. dollar and Treasury yields rose, making the metal less attractive for investors in the short term.
How could this situation affect markets going forward?
If oil prices remain high or supply disruptions worsen, inflation could rise and global markets may stay volatile, while safe-haven assets like gold could gain support in the longer term.
