Wall Street Slides While Oil Prices Near $110/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks fell Wednesday as another jump in oil prices renewed inflation fears on Wall Street. Brent crude climbed toward $110 a barrel as the Iran war disrupted regional energy flows. Fresh wholesale inflation data also reinforced expectations that the Federal Reserve will hold rates steady.
Brent Crude and US Stocks Quick Looks
- Wall Street turned lower as oil prices surged again.
- The S&P 500 fell 0.6% in midday trading.
- The Dow dropped 380 points, or 0.8%.
- The Nasdaq composite slipped 0.6%.
- Brent crude rose 4.7% to $108.27 a barrel.
- U.S. benchmark crude gained 1.5% to $97.61.
- Investors worried that rising energy costs could fuel more inflation.
- Wholesale inflation in the U.S. accelerated to 3.4% in February.
- Markets now expect the Fed to leave interest rates unchanged.
- Retail earnings and bond yields added to the day’s market pressure.
Deep Look: Wall Street Slides While Oil Prices Near $110
U.S. stocks moved lower Wednesday as surging oil prices rattled investors and added to concerns that inflation may remain stubbornly high, even before the economic fallout from the Iran war fully reaches households and businesses.
The S&P 500 fell 0.6% by early afternoon, putting it on track for its first loss of the week. The Dow Jones Industrial Average dropped 380 points, or 0.8%, while the Nasdaq composite lost 0.6%.
The main pressure point for markets was another strong climb in energy prices. Brent crude, the international benchmark, jumped 4.7% to $108.27 a barrel, moving closer to the $110 mark. U.S. benchmark crude also rose, gaining 1.5% to $97.61 a barrel.
Oil and natural gas prices have surged since the war with Iran began, with traders increasingly worried that ongoing disruptions in the Persian Gulf could keep energy supplies constrained. Iran’s state television said Wednesday that the country would target oil and gas infrastructure in Qatar, Saudi Arabia and the United Arab Emirates after an attack on facilities linked to its offshore South Pars gas field.
Those threats intensified fears that the war could create a longer-lasting shock for global energy markets. If high oil and gas prices persist, they could send another wave of inflation through economies already struggling with affordability concerns.
That worry deepened after a U.S. report released Wednesday morning showed inflation at the wholesale level was already heating up before the war began. The producer price index rose 3.4% in February from a year earlier, a hotter-than-expected reading that suggested businesses are still facing strong cost pressures.
Investors now worry that those wholesale costs could eventually be passed on to consumers, pushing everyday prices higher. The fresh data also strengthened expectations that the Federal Reserve would leave interest rates unchanged at the end of its latest policy meeting.
Markets have largely ruled out a near-term rate cut. While lower rates could help support hiring, business activity and stock prices, they could also add fuel to inflation. President Donald Trump has continued pressing the central bank to reduce borrowing costs, but rising prices have made that far less likely in the immediate term.
Wall Street’s bigger focus is now on what Fed officials signal for the rest of 2026. Investors are looking for clues about whether policymakers still expect at least one rate cut later in the year. That outlook has become much harder to assess because of the war’s impact on oil, gasoline and broader inflation trends.
Gas prices in the U.S. are already moving sharply higher. The national average for a gallon of gasoline climbed again overnight to $3.84, a steep increase from levels that were well below $3 last month. Rising fuel prices are likely to push inflation readings higher over the next several weeks.
Analysts also noted that oil flows remain constrained even as there were signs Iran may be allowing some vessels to move through the Strait of Hormuz. The key shipping lane, which handles roughly one-fifth of the world’s crude oil, remains under intense scrutiny as Iran continues blocking ships linked to the U.S., Israel and allied countries.
Corporate earnings reports produced a mixed picture on Wall Street.
Macy’s climbed 5.2% after posting stronger quarterly profit and revenue than analysts expected. The department store operator, which also owns Bloomingdale’s and Bluemercury, is trying to revive growth under CEO Tony Spring, and the latest results gave investors some encouragement.
General Mills, however, slipped 1% after the packaged food company reported weaker quarterly profit than analysts had forecast. The maker of Pillsbury, Progresso and Wheaties said it is continuing to invest in its brands while maintaining its full-year profit guidance.
In the bond market, Treasury yields edged higher after the inflation report. The yield on the 10-year Treasury rose to 4.22% from 4.20% late Tuesday. That remains well above the 3.97% level seen before the Iran war began, reflecting how much investor expectations have shifted on inflation and interest rates.
Overseas markets offered a mixed backdrop. European indexes mostly declined as the rise in crude prices spread through global trading. In Asia, however, markets ended stronger. Japan’s Nikkei 225 gained 2.9% after export data for February came in better than expected, while South Korea’s Kospi surged 5%.
For investors, the market’s message was clear: oil remains the dominant force right now. As long as energy prices keep climbing and the Middle East conflict threatens global supply routes, stocks are likely to stay under pressure and inflation worries will remain front and center.
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