Stocks on Wall Street opened sharply down Tuesday as investors digested surging oil prices and the realization that the U.S.-Israeli war with Iran is likely deepening instead of abating after days of military strikes.
The Dow Jones Industrial Average remained down 600 points around the lunch hour, reversing a Monday rebound, and the international benchmark for oil — Brent crude — surged 7%, to $83 a barrel.
President Trump said he isn’t worried about oil prices.
“As soon as this ends, those prices are going to drop, I believe, lower than even before,” he said during a White House meeting with German Chancellor Friedrich Merz.
All three major New York stock indexes were down over 1% at midday.
Fears of oil shortages spiked after an Iranian Revolutionary Guard official said Monday that the Strait of Hormuz, a vital oil tanker artery, would be closed and that ships trying to traverse it would be “set ablaze.”
Mr. Trump ordered joint U.S.-Israeli strikes on Iran early Saturday, saying Tehran did not agree to American demands during negotiations over the Islamic republic’s nuclear ambitions, missile programs and support for terrorist proxies in the Middle East.
Tehran retaliated against Israel and U.S. allies after the strikes killed Supreme Leader Ayatollah Ali Khamenei and other top officials, raising fears of a widening and prolonged conflict. Iran also has targeted U.S. military bases.
Stocks plummeted early on Monday, the first day of trading since the war began, but recovered losses later in the day.
Yet the crisis seemed to deepen on Tuesday. Iran targeted the U.S. embassy in Riyadh, Saudi Arabia, and Israel continued to attack Iran-backed Hezbollah forces in Lebanon.
Oil-rich Gulf states such as Kuwait and the United Arab Emirates also have been targeted by Iran.
Mr. Trump boasted about record highs on the stock market as recently as Friday.
“Is anybody unhappy with the job I’m doing?” Mr. Trump said in Corpus Christi, Texas. “Your 401ks have doubled, right? Are they doubled?”
The International Monetary Fund, a 191-nation group that promotes economic stability and fights poverty, said Tuesday it is monitoring developments in the Middle East.
“So far, we have observed disruptions to trade and economic activity, surges in energy prices, and volatility in financial markets,” the IMF said in a written statement. “The situation remains highly fluid and adds to an already uncertain global economic environment. It is too early to assess the economic impact on the region and the global economy. That impact will depend on the extent and duration of the conflict.”
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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