Stocks Slip as Oil Surges and Trump Pressures Iran over Stalled Talks

With input from the Wall Street Journal, CNBC, NBC News, the Financial Times, and AP.

Wall Street is wobbling again – and oil is calling the shots.

US stocks fell Thursday as rising crude prices and growing uncertainty over the war with Iran rattled investors. The S&P 500 dropped 0.7%, wiping out the previous day’s gains. The Dow Jones Industrial Average slipped about 78 points, while the Nasdaq fell a sharper 1%.

The mood wasn’t any better overseas. Markets across Europe and Asia slid even more, reflecting the same unease: no clear end to the conflict, and plenty of risk in the meantime.

Oil is at the center of it all.

Brent crude jumped 4.5% to just over $100 a barrel, while US crude climbed above $94. Both are up sharply from pre-war levels near $70. At times during the conflict, prices have flirted with $120, and traders aren’t ruling out another spike.

The choke point is the Strait of Hormuz. Roughly a fifth of the world’s oil flows through that narrow passage, and Iran tightening its grip there has markets on edge. Any disruption could send prices flying – and with it, inflation.

That’s already starting to show up elsewhere. Treasury yields are climbing again, with the 10-year hitting around 4.37%, up from under 4% before the war began. Higher yields mean pricier mortgages, costlier loans, and more pressure on an economy that was already showing signs of slowing.

At the same time, hopes for interest rate cuts are fading fast. Earlier this year, traders expected multiple cuts in 2026. Now? Much less confidence. Rising energy costs are making the Federal Reserve’s job harder by keeping inflation sticky.

Geopolitics isn’t helping.

President Donald Trump struck a more aggressive tone Thursday, warning Iran to move quickly in negotiations.

“They better get serious soon, before it is too late,” he wrote, adding that there would be “no turning back” if things escalate further.

That message landed as fighting continued and more US troops moved closer to the region. A ceasefire still looks distant. Iran has pushed back on US proposals and floated its own plan, including demands for reparations.

Markets have been swinging all week on every headline. Early optimism about talks briefly lifted stocks. That didn’t last.

On Wall Street, tech names added to the drag. Meta fell more than 5%, and Alphabet dropped nearly 2%, both weighed down by fresh legal setbacks tied to social media addiction claims. The rulings themselves didn’t cost much – but investors are wary of what could come next.

There were a few bright spots. Energy companies rallied alongside oil prices, with ConocoPhillips and Chevron both moving higher.

Still, the bigger picture feels unsettled. Traders are watching oil, watching the Strait of Hormuz, and watching for any sign that diplomacy might actually go somewhere.

For now, there’s more noise than clarity – and markets are reacting accordingly.