Wall Street closes down as oil prices spike on Middle East conflict
The S&P 500 indexes that track performance of major US companies in the industrials, materials and healthcare sectors fell more than 2% each.
US stocks closed down on Thursday as the Middle East entered its sixth day, pushing oil prices higher and spurring worries about inflation and whether the Federal Reserve will cut interest rates.
Expansion of the conflict to more countries fed fears of disruption in the Strait of Hormuz, a critical energy choke point, where missile and drone threats have drastically reduced tanker traffic.
This lifted US 8.5% to $81 per barrel, the highest since July 2024. Global benchmark Brent crude rose 4.9% to $85.41. Traders worry a prolonged interruption could feed inflation and slow economic growth.
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"Look at oil today, it tells you everything you need to know about why the stock market's down," said Michael Antonelli, market strategist at Baird Private Wealth Management. "The market is really trying to grapple with how long this conflict will last".
The Dow Jones Industrial Average fell 784.67, or 1.61%, to 47,954.74 points, the S&P 500 lost 0.56%, to 6,830.71 points and the Nasdaq Composite closed down 0.26%, to 22,748.99 points.
The S&P 500 indexes that track performance of major US companies in the industrials, materials and healthcare sectors fell more than 2% each. The passenger airlines sub-sector tumbled 5.4%, with Southwest Airlines Co down 6.9%.
Limiting losses were energy and technology stocks. The S&P 500 index which tracks the performance of major US energy companies rose 0.6% with the prospect of higher revenue on energy prices. Chevron gained 3.9%.
With the US-Israeli air war against Iran raging, Wall Street has outperformed its European and Asian counterparts this week, aided primarily by technology stocks that bore the brunt of February's selloff. The Nasdaq is 0.36% up since the conflict started.
