United States oil prices soared again to reach the highest levels since 2024 and stocks crumble at the opening bell as the war with Iran escalates.
A senior commander from Iran’s Revolutionary Guards said Iran has closed the Strait of Hormuz and warned that any vessel attempting to transit the waterway would be targeted, Iranian media reported. About a fifth of the world’s oil travels through the Strait of Hormuz.
Meanwhile, there’s no indication of an immediate resolution. Secretary of State Marco Rubio predicted “the hardest hits are yet to come” against Iran, just days after joint U.S.-Israel strikes killed top Iranian officials and prompted retaliation against Israel and missile attacks at Arab nations with U.S. bases across the Middle East.
“The next phase will be even more punishing on Iran than it is right now,” Rubio told reporters on March 2 without elaborating. “The hardest hits are yet to come from the U.S. military.”
At 10:06 a.m. ET, West Texas oil was up 7.97% at $76.91 per barrel. The blue-chip Dow slid 2.19%, or 1,069.90 points, to 47,834.88 while the broad S&P 500 index dropped 2.02%, or 139.05 points, to 6,742.57 and the tech-heavy Nasdaq slumped 2.11%, or 480.409 points, to 22,268.449.
Airline stocks are among the hardest hit amid thousands of flight cancellations and rising fuel prices due to the war. Rerouting around the region can add hours of flight time and throw off tight flight schedules.
Shares of Amazon are also about 2% lower after the e-commerce giant said it expected extended service outages following drone attacks on three of its data centers in the Middle East.
Oil prices are key
“Much will depend on the price of oil,” said Deutsche Bank economist Jim Reid in a note. “Any sustained spike would undoubtedly trigger a more meaningful risk-off move.”
Investors fear a prolonged jump in oil prices would stoke inflation across the broader economy and further complicate policy decisions for central bank officials already contending with price increases driven by tariffs.
“A prolonged conflict in the Middle East pushing oil to $90-100 (per barrel) for a sustained period would be a significant headwind for the global economy,” wrote Jennifer McKeown, chief global economist at research firm Capital Economics, in a commentary. “The adverse effects should be limited by central banks ‘looking through’ the shock and avoiding rate hikes, but cuts would probably be delayed.”
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
This article originally appeared on USA TODAY: Oil prices soar again and stocks crumble as Iran war escalates
Reporting by Medora Lee, USA TODAY / USA TODAY
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