US stocks slipped on Thursday and oil prices continued to rise amid ongoing conflict in the Middle East.
After relatively quiet trading on Wednesday, US crude oil prices rose more than 7% on Thursday. International oil benchmarks rose by around 4%.
Stocks resumed the sell-off that started earlier in the week. As of afternoon trading, the S&P 500 was down more than 1.4% and the Nasdaq composite was down 1.3%. The Dow Jones industrial average fell nearly 1,000 points, or about 2%.
Energy stocks were the only S&P 500 sector to trade in the green, while the industrials, materials and consumer staples sectors suffered big losses.
Retail gas prices also continue to rise. The nationwide average price per gallon is now $3.25, up more than 30 cents since Sunday, according to data from price-tracking service GasBuddy.
Those rising prices, fueling fears of renewed inflation, have pushed up Treasury yields. By midday, the 10-year US government bond yield was above 4.1% and the 30-year yield was above 4.75%. Conversely, the average 30-year mortgage rate hit 6.13% earlier Thursday, as the wider impact of the Iran war sunk in.
Less than a week after it began, there are few signs the US-launched war on Iran is slowing. Iran’s Foreign Minister Abbas Araghi told NBC News on Thursday that he was confident Iran could counter the US if it tried to invade.
Few efforts are being made to mitigate the economic fallout from the US war on Iran.
On Tuesday, President Donald Trump said he was ordering the US International Development Finance Corporation to provide “political risk insurance and guarantees for the financial security of all maritime trade, particularly for fuel traveling through the Gulf.”
Insurance brokers say they are engaging with the administration to try to restart shipping off Iran’s coast, but hundreds of ships remain stuck.
The Strait of Hormuz, off the southern coast of Iran, is a major route for about 20% of the world’s daily oil supply. Since the US and Israel struck Iran for the first time on Saturday, no traffic has passed through the waterway, leading to fears that it could lead to a global oil supply crisis.
Apart from oil, Qatar – it is the world’s No. 1 producer of liquefied natural gas. 2 Exporter – production has been suspended due to the effective closure of the Strait of Hormuz and “military attacks on Qatar Energy’s operational facilities”.
US natural gas prices have risen nearly 4% since Sunday as a result, while natural gas prices in Europe are up more than 50%.
