By STAN CHOE
NEW YORK — Doubt is taking over again from hope on Wall Street about a possible end to the war with Iran, and stocks are back to falling as oil prices rise Thursday.
The S&P 500 sank 1.4%, more than erasing its gain from the day before, and is back on track for a fifth straight losing week. That stretches back to before the war with Iran began, and it would be the longest such streak in nearly four years.
The Dow Jones Industrial Average was down 384 points, or 0.8%, with an hour remaining in trading, and the Nasdaq composite was 2% lower.
Stock markets likewise fell sharply across much of Asia and Europe. They’re the latest flip – flops for financial markets in a week that began with President Donald Trump’s announcement of productive talks about ending the war. That led to Iran’s public dismissal of a U.S. ceasefire proposal, while Iran issued its own plan, which includes reparations for the war.
On Thursday, the fighting continued, and thousands more U.S. troops neared the region. Iran, meanwhile, tightened its grip on the crucial Strait of Hormuz. The narrow waterway typically sees a fifth of the world’s oil exit the Persian Gulf through it to reach customers worldwide, and blockages there have sent oil prices near $120 per barrel at times.
A barrel of Brent crude oil climbed 4.8% to settle at $101.89 as hopes dimmed for a potential return to normal for the strait. That’s up from roughly $70 before the war began. Benchmark U.S. crude rose 4.6% to $94.48 per barrel.
“They better get serious soon, before it is too late,” Trump said on his social media network about Iran’s negotiators, “because once that happens, there is NO TURNING BACK, and it won’t be pretty!”
The rise in oil prices worsened worries about high inflation and sent Treasury yields higher in the bond market.
The yield on the 10-year Treasury climbed to 4.41% from 4.33% late Wednesday and from just 3.97% before the war started. That leap has already sent rates higher for mortgages and other kinds of loans for U.S. households and businesses, which slows the economy.
A report on Thursday morning said slightly more U.S. workers filed for unemployment benefits last week, though the number is still low compared with historical figures.
A slowing job market would typically encourage the Federal Reserve to cut interest rates to juice the economy. But hopes have cratered on Wall Street for a possible cut to interest rates this year, even though traders came into 2026 forecasting several. That’s because lower interest rates carry the risk of worsening inflation, and the spike in oil prices has heightened those worries.
On Wall Street, tech stocks were the heaviest weights on the market.
Meta Platforms fell 8.1%, and Alphabet sank 3.3% after each had held relatively steady the day before, when a jury found Instagram and YouTube liable in a landmark social-media addiction trial.
The financial penalties were small compared with the companies’ vast profits, but it could herald a watershed moment that invites more lawsuits.
Other Big Tech stocks also fell, including drops of 3.6% for Nvidia and 1.8% for Amazon. Apple was an outlier and rose 0.6%.
Commercial Metals fell 2.2% after the maker of steel rebar and other products reported a weaker profit for the latest quarter than analysts expected. CEO Peter Matt said bad weather hurt its North American operations during the quarter, but underlying market conditions looked favorable.
In stock markets abroad, Germany’s DAX lost 1.5%, Hong Kong’s Hang Seng sank 1.9% and South Korea’s Kospi dropped 3.2%. Japan’s Nikkei 225 had one of the world’s milder losses, at 0.3%.
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AP Business Writers Chan Ho-him and Matt Ott contributed.
