United States benchmark averages resumed their decline on Thursday (Friday AEDT) after a brief rebound the previous session, as a sharp surge in oil prices renewed investor concerns that the escalating conflict with Iran could disrupt global energy supplies and fuel inflation.
The Dow Jones Industrial Average fell 784.7 points, or 1.6%, to close at 47,954.7. The S&P 500 dropped 38.8 points, or 0.6%, to 6,830.7, while the Nasdaq Composite slipped 58.5 points, or 0.3%, to finish at 22,749.0.
Energy markets were at the centre of investor concerns after oil prices spiked following unconfirmed reports that Iran had struck an oil tanker with a missile.
International benchmark Brent crude climbed sharply, finishing settling 5% higher at US$85.41 per barrel, the highest since 18 July 2024.
West Texas Intermediate crude futures also surged 6.2% to $79.31 per barrel, trading at the highest level since 15 January 2025.
The gains came after a brief period of stabilisation the previous day, when calmer oil markets helped lift the Dow by more than 200 points on Wednesday.
Geopolitical tensions remained elevated as Iranian officials signalled no immediate interest in negotiations. Iranian Foreign Minister Abbas Araghchi said Tehran was “not asking for a cease fire” from the United States or Israel and added that “we don’t see any reason why we should negotiate”.
Concerns about a potential disruption to energy shipments through the Persian Gulf had eased slightly earlier in the week after President Donald Trump said the United States was preparing to provide risk insurance and naval escorts for ships travelling through the Strait of Hormuz to maintain the flow of global oil supplies.
However, military officials continued to signal an expanding U.S. presence in the region. Defence Secretary Pete Hegseth told reporters that the United States was “winning decisively” in its conflict with Iran and confirmed that additional forces were arriving in the region.
Meanwhile, Treasury Secretary Scott Bessent said President Trump’s recently announced global tariff policy would soon take effect, with a temporary 15% duty on imports expected to be implemented this week.
Despite the broader market sell-off, Berkshire Hathaway stood out as one of the session’s stronger performers. Shares of the conglomerate rose more than 2% after the company revealed it had resumed repurchasing its own stock for the first time since 2024.
Chief executive Greg Abel also purchased $15 million worth of shares personally.
Economic data released during the session offered mixed signals about the health of the U.S. labour market. Challenger data showed announced job cuts dropped 72% year-on-year to 48,300 in February. The 12-month moving average of planned layoffs also declined to 93,100, suggesting conditions in the labour market may be stabilising after a period of uncertainty.
However, hiring activity remained subdued. Announced hiring plans for the year to date were down 56% compared with the same period in 2025, indicating that companies are still cautious about expanding their workforce.
Weekly unemployment claims figures also pointed to a relatively steady labour market. Initial jobless claims for the week ended 28 February were unchanged at 213,000, slightly below expectations of 215,000.
Investor attention is now turning to Friday’s closely watched U.S. nonfarm payrolls report. Economists expect a rise of 59,000 in February, while the unemployment rate is forecast to remain unchanged at 4.3%.
On the bond markets, the yield on the benchmark 10-year U.S. Treasury rose 0.7% to 4.129%, while the two-year yield climbed 0.8% to 3.576%.
