Stocks worldwide plunge on Tuesday as fears mount over the expanding conflict with Iran, threatening prolonged harm to the global economy. Oil prices rocket higher, amplifying market turmoil.
The S&P 500 drops 1.8% in early trading. The Dow Jones Industrial Average falls 907 points, or 1.9%, by 9:35 a.m. ET. The Nasdaq Composite slides 2.1%, while Canada’s S&P/TSX Composite loses over 1,000 points at the open.
U.S. stocks had rebounded from early losses on Monday to close with modest gains, but only if oil prices stayed below $100 per barrel. Tuesday sees crude nearing that threshold, sparking fresh sell-offs.
Oil Prices Surge on Escalating Strikes
Brent crude, the global benchmark, leaps 8.2% to $84.14 per barrel—up from near $70 a week earlier. U.S. benchmark crude climbs 8% to $76.92.
Iran targets the U.S. embassy in Saudi Arabia, broadening attacks to vital oil and natural gas zones. Tension centers on the Strait of Hormuz, a chokepoint for one-fifth of world oil shipments.
Prolonged War Looms
U.S. and Israeli strikes already claim Iranian Supreme Leader Ayatollah Ali Khamenei. President Donald Trump signals extended combat, posting late Monday on social media: “Wars can be fought ‘forever,’ and very successfully” with vast U.S. munitions stockpiles.
Inflation Pressures Mount
Soaring oil fuels inflation, driving up gasoline and shipping expenses. The U.S. average gasoline price rises 11 cents overnight to $3.11 per gallon, according to AAA data.
Energy-dependent sectors bear the brunt. South Korea’s Kospi index craters 7.2%—its steepest drop in two years—while Japan’s Nikkei 225 dips 3.1%, despite ample energy reserves exceeding 200 days.
Airlines tumble on fuel hikes and flight cancellations: United Airlines sheds 4.1%, American Airlines 4%, and Delta Air Lines 3%.
Bond markets reflect inflation worries, with the 10-year Treasury yield climbing to 4.10% from 4.05% late Monday and 3.97% Friday. Higher yields signal pricier loans for mortgages and business financing.
