US stock markets closed firmly in the red on Thursday as the major indices fell to their lowest since November of last year.
The investors remained on edge as the US-Iran war continued to weigh on the sentiment, and oil prices continued their upward trajectory.
Dow Jones closed 739 points lower at 46,677.67, while the S&P 500 dropped 1.52% to 6,672.58.
The tech-heavy Nasdaq ended in the same territory, sliding 404 points to 22,311.98.
Geopolitical firestorm drives the selloff
The US-Iran conflict entered its 13th day on Thursday with Iranian officials vowing to keep the world’s oil chokepoint shut.
Oil prices extended their surge with Brent topping $100 briefly before pulling back, stoking fears of the biggest supply shock since the 1970s.
While Trump’s team pointed to strategic reserves, delayed deliveries left markets worried about renewed inflation.
Despite the broader headwinds, energy stocks gained on Thursday with the XLE ETF rising 0.9% as crude’s geopolitical premium dominated.
ExxonMobil (XOM) advanced 1.3% to $153.53 after trading between $151.67-$154.03, extending its four-week 1.1% uptrend.
Chevron (CVX) surged 2.7% to $196.97 from $191.79, hitting an intraday high of $198.52 on a robust volume of 41 million shares.
The tech sector remained under pressure on Thursday, with all major companies like Nvidia, AMD, and Micron closing in the red.
Thursday’s tape came as a change for tech investors, as so far the AI momentum was dominating the broader market uncertanity.
Gold’s tepid response to the latest US-Iran flare-up defies safe-haven norms, lingering around $5,175 per troy ounce two weeks into the conflict.
Fed faces war-clouded meeting
Amid the heightened uncertainty, the Federal Reserve officials face a high-stakes policy meeting next week.
The March Fed policy meeting is going to be interesting as it comes in the middle of the US-Iran conflict, stubborn inflation signals, softening jobs data, and tariff uncertainties from the Trump administration.
With the federal funds rate steady at 3.50%-3.75%, markets see virtually zero odds of a cut.
CME FedWatch tool pricing reflects near-certainty of a hold, as war-driven oil spikes to $98+ threaten to undo February’s tame 2.4% CPI.
The overnight bank lending rate ripples through mortgages, auto loans, credit cards, and savings yields, pinning consumers in place.
Analysts broadly expect the Federal Reserve to hold steady next week, opting to monitor the Iran conflict’s path before weighing in on whether inflation or employment demands priority action.
The concerns are also raised around the time it will take to get things back to normal after the war ends.
President Donald Trump has already pointed out that the gasoline prices may lag oil’s retreat due to the “rockets and feathers” effect.
As economists note, pump prices rocket upward on crude spikes but drift down like feathers.
Fuel distributors hold refinery-sourced inventory bought at peak rates, delaying relief for consumers until fresh, cheaper supplies cycle through.
This disconnect means drivers could face elevated costs for weeks post-de-escalation, compounding sticker shock amid Hormuz uncertainty.
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