So much for the tentative rebound. U.S. stocks turned lower on Thursday, and the reason was written in the price of oil. A fresh diplomatic standoff with Iran sent crude prices soaring, which in turn sent a shiver through equity markets worried about what that means for inflation and interest rates.
The catalyst was pretty straightforward: Tehran publicly rejected Washington's latest ceasefire proposal. The White House said it had sent a 15-point peace plan via Pakistan and that talks were ongoing, but Iranian officials shot it down. Instead, they countered with their own five-point framework that would, notably, grant them sovereign control over the Strait of Hormuz—a critical chokepoint for global oil shipments.
Speaking at a Cabinet meeting, President Donald Trump said Iran "desperately wants to make a deal," adding that Tehran had offered the U.S. "eight boats of oil" and "very substantial talks" are underway. But the public impasse left markets pricing in a protracted conflict with no clear off-ramp, effectively anchoring energy prices at elevated levels.
And when we say elevated, we mean it. WTI crude oil surged 4.1% to $94.04 per barrel. Brent crude jumped 5.4% to $107.73.
By midday in New York, the mood had soured. The S&P 500 fell 0.7%, the Dow Jones Industrial Average declined 83 points (0.2%), and the Nasdaq 100 slid 1%. The Russell 2000 shed 0.7%.
Here’s a snapshot of where things stood around lunchtime:
| Index | Last | % Change |
|---|---|---|
| S&P 500 | 6,547.01 | -0.7% |
| Dow Jones | 46,346 | -0.2% |
| Nasdaq 100 | 23,929 | -1% |
| Russell 2000 | 2,519.05 | -0.68% |
Data as of 12:00 PM ET
The major ETFs tracked the move: the Vanguard S&P 500 ETF (VOO) slid 0.7%, the SPDR Dow Jones Industrial Average ETF Trust (DIA) fell 0.2%, the Invesco QQQ Trust (QQQ) declined 1.0%, and the iShares Russell 2000 ETF (IWM) lost 0.7%.
Rising energy costs also solidified a narrative that’s bad news for gold: the Federal Reserve might have to pause any thoughts of cutting rates. That sapped the appeal of non-yielding assets. Spot gold fell 1.7% to $4,450.13 per troy ounce, with the SPDR Gold Shares (GLD) tracking the decline. Meanwhile, the CBOE Volatility Index (VIX)—the market's "fear gauge"—climbed 5.9% to 26.82, signaling rising anxiety.














