Drone strikes hit the US Embassy in Riyadh overnight, and the State Department ordered evacuations at facilities in Bahrain, Iraq, and Jordan. The reported potential closure of the Strait of Hormuz, through which roughly 20% of global oil flows, is the dominant market narrative of the session.
The West Texas Intermediate light crude jumped 6.4% to $75.8 a barrel, on pace for the sharpest 2-day rally since March 2022,. US natural gas rose 6.3% to $3.15, while European gas prices have almost doubled in two days.
Speaking alongside German Chancellor Friedrich Merz in the Oval Office, President Donald Trump stated that Iran no longer has air defenses or detection capabilities, while suggesting he may have preempted an Iranian strike on U.S. interests.
Trump also directed Treasury Secretary Scott Bessent to sever all trade relations with Spain after criticizing both Madrid and the U.K. as uncooperative in the conflict.
By 3:20 p.m. in New York:
The S&P 500 was down 0.9% to 6,818
The Nasdaq 100 fell 1.1% to 24,719
The Dow Jones Industrial Average lost 0.7% to 48,567.
The Russell 2000 declined 1.36% to 2,619.
The CBOE Volatility Index surged 6% to 22.74, reflecting elevated near-term fear across options markets.
All 11 S&P 500 Sectors Traded In The Red
Materials led losses with the Materials Select Sector SPDR Fund (NYSE:XLB) down 2.9%, followed by the Industrial Select Sector SPDR Fund
