The S&P 500 dropped 1.6% in midday trading after falling as much as 2.5% in the morning. The Dow Jones Industrial Average was down 840 points, or 1.7%, as of 11:30 a.m. Eastern time, and the Nasdaq composite was 1.7% lower.
It was just a day ago that U.S. stocks opened with sharp losses, only to recover all of them and end the day with slight gains. But that was with the caveat that oil prices did not jump too high, like to more than $100 per barrel.
On Tuesday, oil prices soared again and raised more alarms. The price for a barrel of Brent crude, the international standard, leaped another 7.8% to $83.79. That's up from close to $70 less than a week ago. A barrel of benchmark U.S. crude, meanwhile, rose 7.6% to $76.63.
Oil prices made the jump as Iran struck the U.S. Embassy in Saudi Arabia, part of a widening of targets that also includes areas critical to the world’s oil and natural gas production. Worries are particularly high about the Strait of Hormuz off the coast of Iran, a narrow passageway where roughly a fifth of the world’s oil passes. That makes it crucial for the global flow of crude.
On Wall Street, airlines continued to sink on worries about rising fuel bills. The war has also led to canceled flights and stranded passengers.
United Airlines fell 5.4%, American Airlines sank 5.8% and Delta Air Lines dropped 4.3%.
