Wall Street Falls as Oil Prices Surge and Housing Data Disappoints
U.S. stocks moved lower on Thursday, pressured by a fresh jump in oil prices and weaker-than-expected housing market data. Investor sentiment remained fragile as markets reacted to ongoing geopolitical tensions and rising energy costs.
At 13:06 ET (17:03 GMT), the S&P 500 dropped 0.8% to 6,575.30 points, while the NASDAQ Composite declined 0.9% to 21,953.16. The Dow Jones Industrial Average also fell 0.9% to 45,806.12.
Markets had already closed lower in the previous session following an attack on Iran’s South Pars gas field—the largest natural gas reserve globally. Iran’s retaliation targeting energy facilities in Qatar and Saudi Arabia has raised fears of a broader regional conflict.
Central Banks Adopt Cautious Stance
Major central banks, including the Federal Reserve, European Central Bank (ECB), and Bank of England (BoE), opted to keep interest rates unchanged this week. Policymakers signaled a cautious approach as uncertainty surrounding the Middle East conflict continues to evolve.
Rising oil prices have prompted these institutions to revise inflation forecasts higher for the year. However, officials emphasized that it remains too early to fully assess the economic impact.
Analysts suggest central banks are now firmly in a “wait-and-see” mode, delaying any significant policy moves until clearer economic signals emerge.
Mixed U.S. Economic Data Sends Signals
Recent economic data painted a mixed picture of the U.S. economy. Initial jobless claims came in lower than expected at 205,000, indicating resilience in the labor market.
However, the housing sector showed signs of weakness. New home sales dropped sharply by 17.6% month-over-month to 587,000 units, marking the lowest level since October 2022.
This divergence highlights growing concerns about the strength of economic growth amid rising borrowing costs and inflation pressures.
Oil Prices Spike on Middle East Tensions
Energy markets saw significant volatility as geopolitical tensions intensified. Brent crude briefly surged nearly 11% to $119 per barrel before easing to around $109, while U.S. crude also posted gains.
European natural gas prices climbed sharply, with Dutch TTF futures rising over 12% following strikes on Qatar’s Ras Laffan LNG facility—responsible for a substantial share of global supply.
The disruption has heightened fears of prolonged supply constraints, especially as tanker traffic through the Strait of Hormuz remains severely restricted.
Geopolitical Risks Drive Market Uncertainty
The ongoing conflict between Iran and U.S.-Israel forces continues to escalate, with limited signs of de-escalation. Reports suggest the U.S. is considering deploying additional troops, while further military actions remain possible.
The situation has become a key driver of both oil prices and broader market sentiment, influencing expectations around inflation and central bank policy.
Micron Shares Drop Despite Strong Earnings
On the corporate front, Micron Technology shares declined more than 4% despite reporting strong quarterly results.
The chipmaker posted a sharp increase in both revenue and earnings, beating analyst expectations. However, investor sentiment was dampened by plans to significantly increase capital expenditure, with over $25 billion earmarked for new manufacturing facilities in fiscal 2026.
The company’s gross margin reached a record high, reflecting strong demand driven by artificial intelligence and data-related technologies.
