Stocks tumble as oil climbs above $95 per barrel

ABC News Radio2 hours ago

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Traders work on the floor of the New York Stock Exchange. (Photo by Michael M. Santiago/Getty Images)

(NEW YORK) — Stocks tumbled on Monday as oil prices climbed in response to the U.S.-Israeli war with Iran.

The Dow Jones Industrial Average fell 460 points, or 0.9%, while the S&P 500 dropped 0.5%. The tech-heavy Nasdaq inched down 0.2%.

The major indexes recovered some of their earlier losses on Monday, however, after oil price hikes cooled. Oil markets settled amid a meeting among Group of Seven (G7) finance ministers about a possible coordinated release from their respective strategic petroleum reserves.

The G7 announced on Monday its decision to forego a release of reserve oil at this time, but markets appeared to view the group as willing to take such action.

The Dow fell as much as 750 points on Monday morning, before paring some of its losses in the afternoon.

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 0.6%.

Oil prices climbed 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 hovered at about $95 per barrel on Monday afternoon, which marked a nearly 5% hike. Since a month ago, oil prices have soared a staggering 50%.

Oil prices climbed as high as nearly $120 per barrel overnight, but retreated after the Financial Times reported G7 finance ministers would meet to discuss a possible coordinated release from their respective strategic petroleum reserves.

After the meeting, oil prices fell further but remained higher than where they stood a day prior.

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.