Stocks drop after oil spikes to highest price since 2024

S&P 500 falls 0.6% as oil prices surge due to war with Iran

Published on Mar. 5, 2026

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U.S. stocks fell on Thursday after the price of oil spiked to its highest level since the summer of 2024 due to the ongoing war with Iran. The S&P 500 dropped 0.6%, erasing its gains for the year so far, while the Dow Jones Industrial Average briefly fell over 1,100 points before finishing with a 1.6% loss. The Nasdaq Composite also slipped 0.3%. The sharp increase in oil prices has raised concerns about the impact on the global economy, consumer spending, and interest rates.

Why it matters

Rising oil prices can have significant ripple effects across the economy, potentially slowing economic growth, squeezing household budgets, and pushing interest rates higher. This could pose challenges for the Federal Reserve's efforts to balance inflation and support the job market. The situation also highlights the vulnerability of global energy supplies to geopolitical conflicts.

The details

The price of benchmark U.S. crude oil jumped 8.5% on Thursday to settle at $81.01 per barrel, while Brent crude rose 4.9% to $85.41 per barrel. These are the highest levels since 2024. The price spikes are due to concerns about disruptions to oil production from the escalating war with Iran. Gasoline prices in the U.S. have already risen 9% in the past week to an average of $3.25 per gallon. Analysts warn that if oil reaches $100 per barrel and stays there, it could be too much for the global economy to withstand.

  • The price of oil spiked on Thursday, March 5, 2026.

The players

Scott Wren

Senior global market strategist at Wells Fargo Investment Institute.

Hock Tan

CEO of Broadcom, a chip company whose stock rose 4.8% after reporting stronger than expected profit and revenue, particularly for AI chips.

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What they’re saying

“While further escalation remains a risk, we think the more likely outcome is an increase in market risk aversion that likely lasts only a short time until investors can see a winding down of hostilities.”

— Scott Wren, Senior global market strategist (Wells Fargo Investment Institute)

“Broadcom benefited from a 74% jump in revenue for AI chips.”

— Hock Tan, CEO (Broadcom)

The takeaway

The spike in oil prices due to the war with Iran has sent shockwaves through global financial markets, raising concerns about the potential impact on economic growth, consumer spending, and interest rates. This situation underscores the vulnerability of the global economy to geopolitical conflicts and disruptions in energy supplies.