Wall Street heads for losses again as Iran war enters 7th day, sending oil prices up another 6%
Wall Street was on track to open lower again Friday as oil prices continued to climb, hitting the highest level in nearly two years less than a week since the U.S. and Israel began bombing Iran, one of the world’s top oil producers.
Futures for the S&P 500 and Dow Jones Industrial Average slid 0.7% before the opening bell, while Nasdaq futures fell 1%.
Benchmark U.S. crude surged 6.8% to $86.57 per barrel as the war with Iran entered its seventh day. Brent crude, the international standard, gained 4.7% to $89.44 per barrel. Both were trading near their highest levels since April 2024.
If oil prices spike further and remain high, some analysts and investors expect it would weigh on global economic growth. Uncertainty over what will happen with the war has caused frenetic swings across financial markets this week.
Oil prices will hinge on a steady resumption of oil flows through the Strait of Hormuz following disruptions of tanker activities there, ING analysts wrote. Roughly one fifth of the world’s seaborne oil is estimated to flow through the waterway located between Iran and Oman.
The conflict in Iran has also halted exports of Iranian gas to much of Asia. If that stoppage is drawn out, it will likely lead to a bidding war between Europe and Asia that would send energy prices even higher, said Fatih Birol, chief of the International Energy Agency.
The prospect of higher fuel prices for an extended period caused shares of major airlines to fall further in early trading Friday. Delta, United and American were all down around 2.5% in premarket after losing between 4% and 5% on Thursday.
Gas prices in the U.S. also rose another seven cents, to an average of $3.32 per gallon, AAA said Friday. That amounts to an 11.4% rise in prices at the pump in the past week.
Elsewhere, in European trading at midday, Britain’s FTSE 100 fell 0.8%, while Germany’s DAX and the CAC 40 in Paris each lost 0.9%.
In Asia, South Korea’s Kospi edged up less than 0.1% to 5,584.87, after a roller coaster week with a record 12% loss on Wednesday followed by a nearly 10% rebound on Thursday. The index had shot above 6,000 in recent weeks before the war began to rattle financial markets.
Tokyo’s Nikkei 225 index gained 0.6% to 55,620.84.
Hong Kong’s Hang Seng jumped 1.7% to 25,757.29, while the Shanghai Composite index rose 0.4% to 4,124.19.
Australia’s S&P/ASX 200 declined 1% to 8,851.00.
Taiwan’s Taiex shed 0.2% and India’s Sensex lost 0.8%.
In currency trading early Friday, the U.S. dollar rose to 157.93 Japanese yen from 157.56 yen. The euro fell to $1.1563 from $1.1611.
Prices for gold and silver were both up less than 1%.