U.S. Stocks Fall as Oil Prices Surge Amid Iran War Escalation
U.S. stock markets dropped Thursday as rising oil prices fueled concerns about the global economy. The S&P 500 fell 0.7%, while the Dow Jones Industrial Average lost more than 700 points, and the Nasdaq slipped 0.3% during midday trading.
Oil prices surged after Iran launched new attacks targeting Israel, U.S. bases, and other locations across the region, increasing fears of long-term disruptions to global energy supplies. Brent crude climbed to $84.52 per barrel, while U.S. crude rose to $79.07, marking a sharp jump from last week.
Higher energy costs are already affecting consumers. The average gasoline price in the U.S. rose to $3.25 per gallon, up about 9% in just one week, raising concerns that households may cut spending.
Retail and airline stocks were among the hardest hit as higher fuel prices increase operating costs and reduce consumer spending. Shares of American Eagle Outfitters dropped 11.8%, while major airlines including American Airlines, United Airlines, and Delta Air Lines also saw significant losses.
Despite the market volatility, some analysts believe the impact may be temporary if tensions in the Middle East begin to ease. However, experts warn that if oil prices climb toward $100 per barrel, the pressure on the global economy could intensify.
Meanwhile, chipmaker Broadcom bucked the trend, with its stock rising 5.5% after strong earnings driven by a surge in demand for AI chips.
Investors are also watching the Federal Reserve closely. Rising oil prices could keep inflation high and delay potential interest rate cuts later this year.
Markets remain volatile as investors monitor developments in the Middle East and the future of global energy supplies.
