Stocks fell on Wall Street Thursday as oil prices jumped to their highest level since the summer of 2024 due to the war with Iran. Higher energy costs raised concerns that the global economy could slow.
The S&P 500 dropped 0.6 per cent, wiping out its small gain for the year. The Dow Jones Industrial Average fell 784 points, or 1.6 per cent, after briefly plunging more than 1,100 points earlier in the day. The Nasdaq Composite slipped 0.3 per cent. In Canada, the S&P/TSX Composite Index lost 332.89 points.
Oil prices surged as fighting raised fears about supply disruptions. U.S. crude jumped 8.5 per cent to settle at $81.01 a barrel, while Brent crude rose to $85.41. Analysts warn that if oil climbs toward $100 a barrel and stays there, it could put serious pressure on the global economy.
Much of the concern centres on the Strait of Hormuz, a key shipping route where about one-fifth of the world’s oil passes.
U.S. President Donald Trump said he is not worried about higher gas prices and believes they will fall once the conflict ends.
Higher oil prices also hurt airline stocks because fuel costs rise when oil becomes more expensive. At the same time, bond yields increased as investors worried that inflation could stay high, which might delay interest rate cuts from the Federal Reserve.
