US stock market: Wall street crashes amid Iran tension, Dow plunges 1,200 points as global sell-off deepens; crude oil surges

A fresh wave of global risk aversion battered Wall Street on Tuesday, with US equities sliding sharply as oil prices spiked again amid fears that the widening war with Iran could inflict deeper and more prolonged damage on the global economy, the Associated Press reported.The S&P 500 fell 2.4 per cent in morning trade and was on course for its worst session since October. The Dow Jones Industrial Average tumbled 1,232 points, or 2.5 per cent, as of 10:30 a.m. Eastern time, while the Nasdaq Composite declined 2.7 per cent, reported AP.The slide follows a volatile start to the week. On Monday, US markets had opened with steep losses before clawing back to close marginally higher, helped by the view that oil prices had not yet breached critical levels such as $100 per barrel. That relief faded on Tuesday as crude prices climbed sharply once again.Brent crude, the international benchmark, jumped 7.8 per cent to $83.84 a barrel. The benchmark has surged from levels near $70 less than a week ago. Meanwhile, US benchmark West Texas Intermediate crude advanced 8.8 per cent to $77.52 per barrel.

Oil prices spiked after Iran struck the US Embassy in Saudi Arabia, broadening its list of targets to include areas central to global oil and natural gas production. Markets are particularly focused on the Strait of Hormuz, a strategic chokepoint off Iran’s coast through which roughly one-fifth of the world’s oil supply passes. Any disruption there could have outsized consequences for global energy markets.Uncertainty over the duration of the conflict is adding to volatility. US and Israeli strikes have already killed Iranian Supreme Leader Ayatollah Ali Khamenei, yet US President Donald Trump has indicated that hostilities could persist for weeks. In a late-night social media post on Monday, Trump said wars can be fought “forever” with the munitions available to the United States.The sharp rise in crude threatens to compound inflation, which remains elevated, by increasing fuel and transportation costs. According to data from motor club AAA, the average US gasoline price rose 11 cents overnight to about $3.11 per gallon.On Wall Street, airline stocks extended losses amid concerns over higher jet fuel costs and travel disruptions linked to the conflict. United Airlines fell 4.1 per cent, American Airlines declined 4 per cent and Delta Air Lines slipped 3 per cent.Bond markets also reflected rising inflation expectations. The yield on the 10-year US Treasury climbed to 4.10 per cent from 4.05 per cent late Monday and 3.97 per cent on Friday. Higher yields translate into more expensive borrowing costs for households and businesses, affecting everything from mortgages to corporate bond issuances.The impact in equity markets has been most pronounced in sectors and countries heavily reliant on energy imports. In South Korea — a major oil importer — the Kospi index plunged 7.2 per cent in its worst session in nearly two years as markets reopened after a holiday. Japan’s Nikkei 225 fell 3.1 per cent, despite analysts noting that Japan maintains strategic energy reserves estimated to last more than 200 days.