Stocks fall, oil soars after Trump warns of intensified Iran operations

WASHINGTON: US stocks fell sharply while oil prices jumped after President Donald Trump announced plans to intensify military operations in Iran, shaking investor confidence and casting doubt on a quick end to the conflict.

In a Wednesday night address, Trump said the US would step up attacks on Iran over the next two to three weeks. This marked a reversal from his earlier statements that the US would leave Iran quickly. He did not provide a clear timeline for ending the conflict or reopening the vital Strait of Hormuz, a key route for global oil shipments.

Market reactions were immediate as oil prices surged about 7 per cent, pushing Brent crude to $108 per barrel, while US crude also climbed amid concerns over potential disruptions in Middle East oil supplies.

Energy stocks benefited from the rally, with companies like Exxon Mobil and Chevron gaining more than 2 per cent.

In contrast, airline stocks fell sharply, with United, Delta, and American Airlines dropping 4–6 per cent due to higher fuel costs.

Overall, major indexes declined, with the Dow Jones down 565 points (1.2 per cent), the S&P 500 down 1.2 per cent, and the Nasdaq down 1.7 per cent.

Investors are now watching closely for the impact of rising oil prices on inflation, consumer spending, and the Federal Reserve’s future monetary policy. The situation also renewed worries about geopolitical risks and market volatility.

In addition, private credit and financial sectors faced pressure after Blue Owl limited withdrawals from some funds, while tech stocks like Micron and Lam Research dropped over 3 per cent each.

The developments highlight how quickly markets react to geopolitical news, especially when it could affect energy supply and global economic stability.