The US market indices opened lower on Thursday, extending a broad risk-off sentiment across global markets as surging oil prices and persistent inflation concerns weighed on investor confidence.
Dow Jones Industrial Average fell about 0.65% or 298 points while S&P 500 and Nasdaq 100 slipped roughly 0.81% and 1.13%, respectively.
The decline follows a sharp selloff in the previous session, which saw the Dow drop to a fresh 2026 low and close below its 200-day moving average, a key technical indicator of long-term trend direction.
Oil surge and geopolitical tensions drive market unease
The latest bout of volatility has been driven largely by escalating tensions in the Middle East, which have disrupted energy markets and reignited inflation fears.
Brent crude surged as much as 5% to around $113–$115 per barrel after Iran retaliated against Israel by targeting energy facilities across the region.
The attacks followed earlier strikes on Iran’s South Pars gas field and extended to key liquefied natural gas infrastructure in Qatar.
The Strait of Hormuz, a critical chokepoint for global oil shipments, remains central to market concerns.
Prolonged disruption could sustain elevated energy prices, feeding into broader inflation pressures.
Fed stance and inflation data cloud outlook
The Federal Reserve’s cautious stance has further complicated the outlook for equities.
Policymakers held interest rates steady on Wednesday and maintained expectations for just one rate cut this year, while acknowledging heightened uncertainty.
Fed Chair Jerome Powell warned of rising near-term inflation risks linked to higher energy prices and emphasized that it remains too early to assess the full economic impact of the conflict.
Hotter-than-expected producer price data has reinforced these concerns.
The Producer Price Index rose more than forecast, suggesting that inflation was already under pressure even before the geopolitical escalation.
Market expectations for monetary easing have shifted accordingly.
Several major banks, including Morgan Stanley, Goldman Sachs, and Barclays, have pushed back their forecasts for rate cuts, with some traders now pricing in easing only by mid-2027.
Tech and travel stocks slide despite mixed corporate news
Equities across sectors reflected the cautious sentiment.
Semiconductor stocks, which had rallied strongly this year, came under pressure despite strong earnings signals.
Micron Technology shares fell about 7.5% in trading as investors weighed higher capital spending plans.
Citi analysts attributed the move to “some profit taking,” following a sharp rally driven by tight memory supply.
Other chipmakers also declined, with SanDisk down more than 5.5%, Western Digital slipping 3.4%, and Nvidia edging 2.46% lower.
Energy-sensitive travel stocks also weakened, with airlines such as Delta Air Lines and United Airlines falling more than 1%.
At the same time, some pockets of resilience remained.
Rivian shares jumped 8.4% after Uber announced plans to invest up to $1.25 billion in the electric vehicle maker.
Meanwhile, asset managers and select consumer stocks showed mixed performance.
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