The S&P 500 dropped 1% and may be heading for its first back-to-back weekly loss since March. The Dow Jones Industrial Average was down 516 points, or 1%, as of 10 a.m. Eastern time, and the Nasdaq composite was 1.8% lower.
Stocks sank under the pressure of rising oil prices, which raise costs for many businesses and limit their customers’ ability to spend. The price for a barrel of Brent crude oil, the international standard, climbed 6.7% to $100.40.
Earlier in the morning, it touched its highest price in two months following attacks on two Saudi oil tankers in the Red Sea. The attacks threaten another avenue that oil companies can use to transport their crude from the Middle East to customers worldwide, along with the Strait of Hormuz.
Underscoring the importance of the sea route for the economy, U.S. President Donald Trump threatened “major military punishment” against the Houthi rebels in Yemen, who are backed by Iran, if they keep attacking ships.
It was just a few weeks ago that Brent had dropped below $72 per barrel, roughly back to where it was before the United States and Iran attacked Iran to begin their war, on hopes that the Strait of Hormuz would fully reopen to oil tankers.
