(NEW YORK) — Stocks tumbled in early trading on Monday as oil prices soared above $100 per barrel in response to the U.S.-Israeli war with Iran.
The Dow Jones Industrial Average fell 720 points, or 1.5%, while the S&P 500 dropped 1.3%. The tech-heavy Nasdaq declined 1.2%.
Indexes fell worldwide on Monday as the spike in oil prices rippled through global markets. Tokyo’s Nikkei 225 index plunged 5.2%, while pan-European STOXX 600 index slipped 1.7%.
Oil prices soared as traders feared a prolonged blockade of the Strait of Hormuz, a trading route that facilitates the transport of about one-fifth of the global oil supply.
U.S. crude oil prices topped $100 per barrel on Monday, marking a staggering 54% increase since late last month.
Oil prices climbed as high as nearly $120 per barrel overnight, but retreated after the Financial Times reported Group of Seven (G7) finance ministers would meet to discuss a possible coordinated release from their respective strategic petroleum reserves.
The average price of a gallon of gasoline in the U.S. soared to $3.47 on Monday from $2.99 a week earlier, AAA said.
In a social media post on Sunday night, President Donald Trump downplayed the rise in oil prices.
“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace. ONLY FOOLS WOULD THINK DIFFERENTLY!” Trump said.
Soon after the war with Iran began on Feb. 28, U.S.-Israeli forces killed Supreme Leader Ayatollah Ali Khamenei in Tehran. His son Mojtaba Khamenei was chosen on Sunday to succeed him.
This is a developing story. Please check back for updates.
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