U.S. stocks plunged and energy prices soared on Tuesday as global markets grew alarmed that the war with Iran could bring weeks of disruption to oil supplies and shipping.
The Dow Jones Industrial Average sank 597 points, or 1.2%, after falling more than 1,200 points earlier in the session. The S&P 500 dropped 1.35%, and the Nasdaq composite fell 1.46%. Wall Street’s fear gauge, the VIX, jumped 12% to its highest level in three months.
The sell-off came after President Donald Trump signaled the U.S.-Israeli operation may last weeks, as previously reported on by The Dallas Express.
Iran’s retaliatory strikes have targeted U.S. embassies and Gulf oil facilities, while shipping through the Strait of Hormuz — which carries nearly 20% of global oil — has slowed to a near standstill.
U.S. crude oil rose 6.5%, pushing its gain since Sunday night above 13% and lifting prices to their highest since January 2025. The international benchmark climbed 6.7% to its highest level since July 2024. Diesel futures surged 12%.
Retail gasoline prices jumped 18 cents since last week to $3.106 per gallon. GasBuddy analyst Patrick De Haan predicted “we’ll likely be closer to $3.10-$3.20/gal” by the end of the week, NBC News reported.
Natural gas futures in the U.S. rose more than 5%. In Europe, they surged 20% after QatarEnergy halted production.
Shares of energy companies were among the session’s top performers.
Markets fell sharply worldwide for a second day. South Korea’s Kospi index tumbled 7.24% for its worst day since April. Japan’s Nikkei 225 dropped 3.06%. Europe’s Stoxx 600 slid nearly 3.2%, with Spain’s IBEX down 4.5%, Italy’s FTSE MIB off 3.9%, and Germany’s DAX lower by 3.6%.
“The negative tone in risk arguably reflects the sense that missile and drone attacks are intensifying and spreading through the Middle East as Iran hit the U.S. embassy in Riyadh and Israel targeted Hizbollah in Lebanon,” analysts at Lloyds Bank said on Tuesday, per NBC News. “Trump equivocating on the potential duration of the war and remaining questions about the precise objective don’t help quell market uncertainty either.”
“That the current war may be ‘inflationary’ is what’s panicking traders today,” said Thierry Wizman, global FX and rates strategist at Macquarie Group, CNN reported. “The view of a short war [has] been upended today because of suggestions from the US administration that the war may be prosecuted for longer than a few weeks.”
The dollar rose 0.8%. Gold fell 4.25%. The conflict also caused major travel disruptions, stranding passengers and cargo in places like Dubai, where Israeli strikes have hit the airport.
