US sharemarkets fell sharply on Thursday as oil prices surged amid escalating tensions in the Middle East. The Dow Jones Industrial Average dropped 739 points, or 1.56%, to close at 46,677.85. The S&P 500 declined 1.52% to 6,672.62, while the Nasdaq Composite lost 1.78% to finish at 22,311.98.
All three major indices closed at their lowest levels of 2026, with the Dow finishing below the 47,000 level for the first time this year.
Oil climbs above US$100 as supply fears intensify
Energy markets drove the sell-off as oil prices rallied sharply on fears of prolonged supply disruptions. Brent crude settled above US$100 a barrel for the first time since 2022, rising 9.22% to US$100.46, while West Texas Intermediate crude jumped 9.72% to US$95.73.
The gains came after Iran’s new Supreme Leader signalled the Strait of Hormuz would remain closed as part of its strategy in the conflict. Shipping traffic through the key energy corridor has largely stalled, heightening concerns about global supply.
Authorities also reported additional attacks on vessels in the Persian Gulf, adding to uncertainty across energy markets.
Markets weigh economic risks
The surge in energy prices has raised concerns about inflation and the potential impact on global growth. Financial and technology stocks were among the weakest sectors during the session, with bank shares leading declines. Energy companies, including Chevron and Exxon Mobil, were among the few stocks to rise.
Despite the recent volatility, the S&P 500 remains about 4% below its record high reached earlier this year.
Australian market outlook
Australian shares are expected to open lower following the sell-off on Wall Street and the continued surge in oil prices. ASX 200 futures were down 28 points, or 0.3%, to 8,592.
Iron ore prices also rose more than 4% amid trade disruptions linked to the Middle East conflict. The Australian dollar weakened around 1% as investors moved toward safer assets.
There is no major Australian economic data scheduled for Friday. Overseas, markets will focus on US personal income, spending and the core PCE inflation measure due later in the evening.
