On March 5, 2026, U.S. stocks experienced a significant decline and oil prices surged following escalating conflict in the Middle East, specifically the U.S. war on Iran. The price of U.S. crude oil jumped more than 8% on Thursday to nearly $81 per barrel, marking a 20% increase since Sunday and reaching its highest level since July 2024. The international oil benchmark also rose by nearly 4% [1].
Major U.S. stock indices saw sharp losses: the S&P 500 was down 1.2%, the Nasdaq composite fell 1%, and the Dow Jones Industrial Average dropped roughly 1,000 points, or about 2%. Energy stocks were the only sector in the S&P 500 trading positively, while industrials, materials, and consumer staples suffered the most [1].
Retail gas prices continued to rise, with the nationwide average reaching $3.25 per gallon, up more than 30 cents since Sunday. Treasury yields also increased, with the 10-year U.S. government bond yield above 4.1% and the 30-year yield above 4.75%. The average 30-year mortgage rate hit 6.13% earlier Thursday, reflecting broader concerns about renewed inflation due to the conflict [1].
Iranian Foreign Minister Abbas Araghchi stated that Iran could confront the U.S. if it attempts a ground invasion, though he indicated Iran has "no intention" to close the Strait of Hormuz at the moment, but would consider all scenarios as the war continues. The Strait of Hormuz, a critical passage for about 20% of the world's daily oil supply, has seen almost no traffic since the U.S. and Israel struck Iran on Saturday, raising fears of a global oil supply disruption. Qatar, the world's second-largest exporter of liquified natural gas, has halted production due to the closure of the Strait and military attacks on QatarEnergy’s facilities [1].
Efforts to mitigate the economic fallout include President Donald Trump's directive for the U.S. International Development Finance Corp. to offer political risk insurance and guarantees for maritime trade, especially energy shipments through the Gulf. Insurance brokers are working with the administration to restart ship traffic, but hundreds of ships remain stranded [1].
CONCLUSION
The U.S. war on Iran has triggered sharp declines in stock markets and a surge in oil prices, with significant disruptions to global energy supply chains. Rising inflation fears and halted maritime trade underscore the high market impact and uncertainty, as efforts to stabilize the situation continue but with limited immediate effect [1].