THE NEW YORK TIMES: US stocks have their biggest drop since start of Iran war
Stocks on Wall Street have suffered their largest daily decline since the start of the war with Iran.
Stocks on Wall Street suffered their largest daily decline since the start of the war with Iran on Thursday, falling as oil prices rose sharply after US President Donald Trump raised the pressure on Iran to accept terms to end the war.
“We’ll just keep blowing them away, unimpeded,” Mr Trump said at his first Cabinet meeting since the war started. While the S&P 500 had started Thursday with a decline, the losses deepened after the meeting.
The index fell 1.7 per cent on Thursday, its biggest daily decline since January, putting the index on course for its fifth straight week of losses for the first time in four years.
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Investors and analysts have been focused on the Strait of Hormuz, the narrow waterway between Iran and Oman that is a vital trading route for oil and natural gas that normally carries as much as one-fifth of the world’s oil supply.
Shipping traffic exiting the Persian Gulf through the strait has been effectively halted since the war began on February 28.
US stock futures rose Thursday night after Mr Trump extended a deadline to attack Iran’s energy infrastructure, amid ongoing negotiations with the Islamic Republic.
Government bond yields, which underpin borrowing costs across consumer and corporate debt, also rose, with the 10-year Treasury yield reaching its highest since July.
Higher interest rates have accompanied the move higher in oil prices as investors fret about the potential for energy costs to reignite inflation. The Federal Reserve has already said it is likely to keep interest rates elevated until it can be sure inflation is under control.
Elsewhere, stocks also tumbled, with bourses in Asia and Europe lit red throughout the day. Major indexes in London, Germany and Sweden all fell, as did benchmarks in Japan and China.
This article originally appeared in The New York Times.
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Originally published on The New York Times
