Wall St plunges as Iran conflict escalates, oil prices soar

Stocks tumble amid surging crude prices and inflation fears after Iran attacks oil tankers

Mar. 13, 2026 at 1:18am

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U.S. stocks fell sharply on Thursday as Iranian strikes on two oil tankers sent crude prices surging toward $100 per barrel, exacerbating inflation concerns and prompting a broad market selloff. The S&P 500 notched its biggest three-day percentage drop in a month, with everything except energy and defensive stocks suffering steep losses. The Dow Jones Industrial Average fell over 1.5%, while the Nasdaq Composite lost 1.78%.

Why it matters

The escalating conflict with Iran and resulting spike in oil prices have raised fears of mounting inflation pressures, which could impact the Federal Reserve's monetary policy decisions. The market turmoil also highlights the vulnerability of the global economy to geopolitical tensions and supply chain disruptions in key regions like the Strait of Hormuz.

The details

Iran's Supreme Leader Ayatollah Mojtaba Khamenei vowed to keep the crucial Strait of Hormuz shut, and the International Energy Agency (IEA) warned the war on Iran was creating the largest-ever oil supply disruption. Front month WTI crude futures settled up 9.7% on the day, while Brent settled up 9.2%, touching $100 per barrel. The U.S. government has told oil companies and shippers to prepare for a possible waiver of the Jones Act to help mitigate rising fuel prices.

  • On Thursday, U.S. stocks fell sharply as Iranian strikes on two oil tankers sent crude prices surging.

The players

Ayatollah Mojtaba Khamenei

The Supreme Leader of Iran who vowed to keep the Strait of Hormuz shut.

International Energy Agency (IEA)

The global energy organization that warned the war on Iran was creating the largest-ever oil supply disruption.

Donald Trump

The U.S. President whose administration has told oil companies and shippers to prepare for a possible waiver of the Jones Act to help mitigate rising fuel prices.

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What they’re saying

“There's a realization that a resolution to the Middle East conflict is being pushed further out. It's a sell first, ask questions later type of mentality. There hasn't been safe sector outside of energy.”

— Ryan Detrick, Chief market strategist at Carson Group in Omaha

“Under the surface of soaring crude prices is the realization that the likelihood of Fed cuts later this year is quickly dwindling.”

— Ryan Detrick, Chief market strategist at Carson Group in Omaha

What’s next

The U.S. Federal Reserve is set to convene on March 17, and its updated summary of economic projections will be closely watched for any adjustments to inflation estimates in light of the surging oil prices.

The takeaway

The market turmoil underscores the vulnerability of the global economy to geopolitical tensions and supply chain disruptions, particularly in critical regions like the Strait of Hormuz. Investors are now grappling with the prospect of higher inflation and the potential impact on the Federal Reserve's monetary policy decisions.