S&P 500, Nasdaq falls; Oil rises 8% on Strait of Hormuz fears

3 minutes of readingMarch 3, 2026 11:02 pm IST

US stock indexes were spooked on Tuesday after President Donald Trump warned that the conflict with Iran could last four weeks, or “even longer.” Wall Street witnessed a massive sell-off in stocks.

The S&P 500, which tracks the top 500 publicly traded companies in the United States, fell more than 1 percent. The Dow Jones Industrial Average fell 907 points or nearly 2 percent before recovering later in the day. The tech-heavy Nasdaq also fell over 1 percent till around 11 pm IST.

Oil warms as conflict with Iran widens

The turmoil in the Middle East caused oil prices to rise after Iran warned that any ship attempting to sail through the Strait of Hormuz would be attacked. Analysts fear the war could seriously damage the global economy.

Brent crude oil briefly rose above $85 a barrel. The price of a barrel of US crude oil rose to $76.92, or 8%. Oil prices skyrocketed as soon as Iran attacked the US embassy in Saudi Arabia. Iran also targeted critical areas such as oil and natural gas production.

The price of gasoline in the United States increased overnight by 11 cents and stood at about $3.11 per gallon, according to the AAA motor club. These overnight jumps affect energy-importing countries. Shares in South Korea’s Kospi plunged about 7.2 percent and Japan’s Nikkei 225 fell 3.1 percent.

Airline Stocks Lose Big

Hit by airspace closures and the prospect of higher aviation fuel costs, U.S. airline stocks fell. United Airlines was down 4.1%, while American Airlines and Delta Air Lines were trading 4% and 3% lower, respectively.

US Treasury yields also soared amid the unrest as investors braced for worsening inflation, pushing the 10-year yield up to 4.10%.

Story continues below this ad.

The Treasury yield was around 4.05% on Monday and 3.97% on Friday. If yield rates rise, everything from mortgages to bond issuance rates will rise for American households and businesses.

What is affecting the market?

Shortly after the assassination of Iranian Supreme Leader Ayatollah Ali Khamenei, President Donald Trump said fighting could continue for weeks. The continuous attacks between countries raise concerns, especially due to market uncertainty around the world. The main concern revolves around the Strait of Hormuz. The Strait of Hormuz is one of the five oil crossings in the world.

The Indian Express’ Express Global Desk offers authoritative, fact-checked and context-based coverage of key international developments shaping global migration politics, policies and trends. The section focuses on stories with direct relevance to Indian and global audiences, combining breaking news with in-depth explanations and analysis. A major focus area of the desk is U.S. visa and immigration policy, including developments related to student visas, work permits, permanent residency pathways, executive actions, and court rulings. The Global Desk also closely follows Canada’s immigration, visa and study policies, covering changes to study permits, post-study work options, permanent residency programs and regulatory updates affecting migrants and international students. All Global Desk reports conform to The Indian Express editorial standards and are based on official data, government notifications, court documents and proprietary sources. The desktop prioritizes clarity, accuracy, and accountability, ensuring readers can navigate complex global systems with confidence. Core Team Express Global Desk is led by a team of experienced journalists and editors with deep experience in international affairs and migration policy: Aniruddha Dhar, Senior Assistant Editor with extensive experience in global affairs, international politics and editorial leadership. Nischai Vats: Deputy editor specializing in American politics, US visa and immigration policy, and policy-based international coverage. Mashkoora Khan: Deputy editor focusing on global developments, with a strong emphasis on policy coverage related to Canada studies, immigration and visas. … Read more

Stay up to date with the latest – click here to follow us on Instagram

Click Here to Get More