Stocks Fall on War Jitters as Oil Keeps Rallying: Markets Wrap
(Bloomberg) — Wall Street traders hit by geopolitical worries kept a lid on stocks and bonds, with oil surging after the release of stockpiles from rich nations was seen as just a reprieve as the war in Iran drags on.
US crude topped $87 despite the International Energy Agency’s approval of its largest-ever release of emergency reserves. Relatively tame inflation data from before the outbreak of the conflict failed to boost equity sentiment, with the S&P 500 falling. Treasuries also dropped, leaving traders anticipating the Federal Reserve will cut rates only once this year.
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President Donald Trump said he didn’t believe Iran was laying mines in the Strait of Hormuz and repeated his suggestion that the war would end soon. The only way to end the conflict is “recognizing Iran’s legitimate rights, payment of reparations, and firm int’l guarantees against future aggression,” Iranian President Masoud Pezeshkian said in a post on X.
The Federal Bureau of Investigation has warned California police that Iran could retaliate for US attacks by launching drones at the West Coast, according to an alert reviewed by ABC News.
The war dragged into a 12th day, forcing governments to shore up oil supplies. The IEA agreed to discharge 400 million barrels from emergency reserves.
“It looks like investors are not convinced this will have the desired effect and are probably expecting the flow of oil through the Strait of Hormuz to remain effectively closed,” said Fawad Razaqzada at Forex.com.
Three vessels were hit by suspected projectiles in the Strait of Hormuz and Persian Gulf on Wednesday. Meantime, fuel tanks at the Port of Salalah have been struck by drones, the state-run Oman News Agency reported.
Despite the prospect of releasing oil reserves, continued uncertainty translates into upside risk for crude prices, and that points to a Fed that will remain cautious about cutting rates, noted Ellen Zentner at Morgan Stanley Wealth Management.
Underlying US inflation slowed in February from a month earlier, offering some relief from price pressures before the war with Iran. But renewed concerns from the conflict – which has boosted energy costs – risk amplifying affordability worries.
“February’s inflation numbers were heading in the right direction, but then along came the conflict in the Middle East, and now the path is changing,” said Brian Jacobsen at Annex Wealth Management.
The S&P 500 lost 0.3%. The yield on 10-year Treasuries rose five basis points to 4.20%.
While investors are far more focused on how the conflict in Iran feeds into inflation over the months ahead, the latest data offers some reassurance that price pressures were not moving in the wrong direction before the recent energy shock, said Seema Shah at Principal Asset Management.
“The Fed has historically looked through energy‑driven price spikes,” she noted. “But with inflation having sat above target for almost five years, it may be harder to do so this time.”
Her base-case remains two rate cuts in the second half of the year, though that outlook would be at risk if energy prices remain high and the conflict drags on.
The Fed will likely resume cutting rates as soon as June, though there’s a risk the next move may be delayed by the oil-price shock caused by the war, according to Morgan Stanley’s Michael Gapen.
Data out Friday will likely paint a picture of more stubborn inflation. Economists see the Fed’s favored core personal consumption expenditures price index up 0.4% again in January. Compared with the same month last year, the median forecast calls for a 3.1% increase.
Corporate Highlights:
Oracle Corp. soared after reporting strong sales and issuing an outlook that suggests little letup in demand for AI computing. Nvidia Corp. will invest $2 billion in Nebius Group NV as part of a strategic partnership to develop and build artificial intelligence data centers. JPMorgan Chase & Co. is restricting some lending to private credit funds after marking down the value of certain loans in their portfolios. What Bloomberg Strategists say…
“Until commercial shipping resumes at scale, the global backdrop — from crude to equities and FX — will remain at the mercy of the boats.”
—Brendan Fagan, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.3% as of 2:36 p.m. New York time The Nasdaq 100 was little changed The Dow Jones Industrial Average fell 0.7% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.3% to $1.1573 The British pound was little changed at $1.3417 The Japanese yen fell 0.5% to 158.91 per dollar Cryptocurrencies
Bitcoin rose 0.7% to $70,707.98 Ether rose 1.6% to $2,075.31 Bonds
The yield on 10-year Treasuries advanced five basis points to 4.20% Germany’s 10-year yield advanced 10 basis points to 2.93% Britain’s 10-year yield advanced 13 basis points to 4.69% Commodities
West Texas Intermediate crude rose 4.7% to $87.38 a barrel Spot gold fell 0.3% to $5,177.75 an ounce ©2026 Bloomberg L.P.
