Oil Jumps again as Iran War Rattles Markets, Dragging Dow Jones Industrial Average Lower

With input from CNBC, AP, the Financial Times, Market Watch, and Investor’s Business Daily.

Wall Street slipped on Wednesday as rising oil prices and fresh tensions in the US–Iran war kept investors on edge.

The Dow Jones Industrial Average dropped roughly 370 points, or about 0.8%, as traders weighed the potential economic fallout from the conflict. The S&P 500 was down around 0.2%, while the tech-heavy Nasdaq Composite managed to stay slightly positive, inching up about 0.1%.

Energy prices were once again the biggest driver of market nerves.

US benchmark West Texas Intermediate surged about 5% to roughly $87 a barrel, while global benchmark Brent crude also jumped close to $92 per barrel.

The spike came even after the International Energy Agency announced it would release 400 million barrels of oil from strategic reserves, the largest coordinated release in the agency’s history. The move is meant to stabilize supply disruptions caused by the war in the Middle East.

But investors aren’t convinced the extra oil will solve the deeper problems.

Ron Albahary, chief investment officer at Laird Norton Wetherby, said the reserve release helps in the short term but doesn’t address broader supply risks tied to the conflict.

One key concern: refined fuel products such as jet fuel that move through the strategically critical Strait of Hormuz.

“The markets are wrestling with the idea of what the off-ramp is here,” Albahary said. “Both sides have dug their heels in, and it’s hard to see how this ends positively in the short term.”

Geopolitical developments continue to rattle markets.

On Tuesday, US forces reportedly sank several Iranian vessels – including 16 minelayers – near the Strait of Hormuz after Tehran attempted to place mines in the shipping route, a vital corridor through which about 20% of the world’s oil supply normally flows.

On Wednesday, the United Kingdom Maritime Trade Operations said three cargo ships near Iran’s coast were struck by projectiles, including one vessel located in the Strait itself.

Those incidents have fueled fears that the conflict could escalate and choke off energy supplies from the Persian Gulf.

Ironically, the market turmoil comes just days after Donald Trump suggested the war could end “very soon.”

Analysts aren’t convinced.

Emmanuel Cau, head of European equity strategy at Barclays, wrote in a note that the longer oil prices stay elevated, the greater the threat to corporate profits and stock valuations.

Adding another layer of uncertainty, fresh economic data showed US inflation is still lingering above the Federal Reserve’s target.

The latest consumer price index report showed prices rose 2.4% year over year in February, matching economists’ expectations. While the number wasn’t worse than forecast, it also didn’t reflect the latest surge in energy costs triggered by the war.

Higher oil prices could soon filter into gasoline, transportation and food costs – potentially pushing inflation higher again.

Not everything on Wall Street was negative.

Shares of Oracle surged about 9% after the cloud and software giant reported stronger-than-expected earnings and revenue for its fiscal third quarter. The company also raised its long-term revenue outlook, helped by strong demand for cloud infrastructure tied to artificial intelligence.

Still, the broader market mood remained cautious.

With oil prices swinging wildly and military tensions escalating around one of the world’s most important energy chokepoints, investors are bracing for more volatility ahead.