US stocks tumble as oil surges, Dow falls over 1,000 points amid escalating Iran conflict

Energy prices climb, Treasury yields rise and volatility spikes as conflict enters fourth day.

• US stocks fell sharply as oil prices surged amid US-Iran tensions
• Brent crude rose above $84, up 8 percent after Iran threats
• Tech stocks and most S&P 500 constituents traded lower Tuesday

Did our AI summary help?

U.S. equities fell sharply on Tuesday as oil prices surged and investors reassessed the duration and scope of the U.S.-Iran conflict.

The Dow Jones Industrial Average dropped as much as 1,033 points in early trade and was last down 902 points, or 1.8 percent. The S&P 500 declined 1.5%, while the Nasdaq Composite fell 1.8 percent. At one stage, the S&P 500 was down 1.9 percent and the Nasdaq was down 2 percent.

The decline reversed Monday’s late-session rebound, when the S&P 500 and Nasdaq erased steep losses to close marginally higher. The Dow also finished well above its intraday lows. Investors had bought equities on expectations that the geopolitical tensions would not materially disrupt economic activity.

Energy markets moved higher again overnight.

Brent crude, the international benchmark, rose above $84 per barrel, up 8 percent on Tuesday after a 6 percent gain on Monday. West Texas Intermediate crude climbed more than 8 percent to above $77 per barrel, also following a 6 percent jump in the prior session.

According to Reuters, citing Iranian media, a commander of Iran’s Islamic Revolutionary Guard Corps said the Strait of Hormuz was closed and warned that ships attempting to transit the route would be set ablaze. The Strait of Hormuz is one of the world’s most critical transit routes for crude oil.

The escalation entered its fourth day with additional developments across the region.

The U.S. embassy in Riyadh was struck by drones as Iran increased attacks on Saudi Arabia. The U.S. State Department ordered evacuations of personnel from Bahrain, Iraq and Jordan.

Tehran-backed Hezbollah launched missiles and drones toward Tel Aviv. Gulf states, including the United Arab Emirates, continued to deploy air defenses against missile and drone attacks.

President Donald Trump said the conflict could continue for more than four weeks.

Energy price gains fed into the bond market. Treasury yields rose on concerns that higher oil prices could revive inflation pressures. Investors have been positioning for additional Federal Reserve rate cuts in the coming months.

In Europe, natural gas markets also reacted. European natural gas futures have surged more than 70% over two days after Iran knocked out Qatar’s liquefied natural gas production.

Sectoral losses were broad-based in U.S. equities.

Technology stocks, which led Monday’s intraday recovery, declined on Tuesday. Nvidia and Broadcom each fell around 2 percent. U.S. memory chip stocks were also under pressure, tracking declines in South Korean memory chip names.

Most S&P 500 constituents traded lower, with energy stocks among the few gainers.

Blackstone shares dropped 7 percent after the Financial Times reported that its private credit fund recorded $1.7 billion in net outflows in the first quarter.

Traditional safe-haven assets provided limited relief. Gold prices slipped after gains in the prior session. The CBOE Volatility Index rose to its highest level since November.

The market reaction marked a shift from Monday’s “buy-the-dip” trade, as investors adjusted to the possibility of prolonged disruption in energy markets and further regional escalation.