Stocks Plunge as Oil Prices Soar on War Worries

Dow drops 800 points as global markets sell off amid concerns over Iran conflict and its impact on energy supplies

Mar. 3, 2026 at 4:49pm

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U.S. stocks suffered a major sell-off on Tuesday as oil prices surged due to escalating tensions between the U.S. and Iran. The S&P 500 dropped 1.6% in midday trading, while the Dow Jones Industrial Average fell 840 points, or 1.7%. The Nasdaq composite was also down 1.7%. Oil prices leaped higher, with Brent crude jumping 7.8% to $83.79 per barrel, as Iran struck the U.S. Embassy in Saudi Arabia, raising fears about disruptions to global energy supplies through the Strait of Hormuz.

Why it matters

The jump in oil prices will worsen inflation, which remains high, and put more pressure on U.S. households and businesses by raising bills for gasoline and shipping. This could further dampen economic growth, especially in sectors heavily reliant on oil and gas. The market volatility also reflects broader uncertainty about how long the conflict with Iran may continue and its potential long-term impact.

The details

The sell-off came after a day of sharp losses on Monday that were later recovered, but the renewed surge in oil prices on Tuesday proved too much for markets to handle. Stocks of companies in energy-intensive industries like airlines were among the biggest decliners, with American Airlines falling 3.1% and United Airlines down 2.4%. The jump in Treasury yields also put downward pressure on stocks, as higher borrowing costs can weigh on economic activity.

  • Oil prices have risen from close to $70 per barrel less than a week ago to over $83 per barrel on Tuesday.
  • Iran struck the U.S. Embassy in Saudi Arabia on Tuesday, escalating tensions in the region.

The players

Donald Trump

The U.S. President, who has been calling for the Federal Reserve to cut interest rates in response to the market volatility.

Ebrahim Jabbari

An Iranian Brig. Gen. and adviser to the paramilitary Revolutionary Guard, who vowed that any ships passing through the Strait of Hormuz would be set on fire.

Ayatollah Ali Khamenei

The late Iranian Supreme Leader, who was killed in a major attack by the U.S. and Israel.

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What they’re saying

“Wars can be fought 'forever,' and very successfully' with the supply of munitions that the United States possesses.”

— Donald Trump

“The Strait of Hormuz is closed. Any ships that passed through it would be set on fire.”

— Ebrahim Jabbari, Iranian Brig. Gen. and adviser to the paramilitary Revolutionary Guard

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

This case highlights growing concerns in the community about repeat offenders released on bail, raising questions about bail reform, public safety on SF streets, and if any special laws to govern autonomous vehicles in residential and commercial areas.