Wall Street Slumps as Oil Prices Surge, Fueling Inflation Fears

New York — The major Wall Street indices closed lower at the end of trade on Thursday (5 March 2026) local time, after conflict in the Middle East pushed crude oil higher and sparked investor concerns about inflationary pressures and the trajectory of Federal Reserve interest-rate policy.

According to Reuters, the Dow Jones Industrial Average fell by 784.67 points, or 1.61%, to 47,954.74. Meanwhile, the S&P 500 slipped 0.56% to 6,830.71 and the Nasdaq Composite declined 0.26% to 22,748.99.

Trading volume on U.S. stock exchanges reached 22.32 billion shares, higher than the 20-day average of 17.82 billion shares.

The escalating conflict involving more countries raised concerns about potential disruption in the Strait of Hormuz, a strategic energy corridor through which about one-fifth of the world’s oil supply passes. Missile and drone threats in the region have reportedly reduced tanker traffic considerably.

Market participants worry that prolonged disruptions to energy supply could push inflation higher while slowing global economic growth.

“Look at oil prices today, it tells you everything you need to know about why stocks are down,” said Michael Antonelli, market strategist at Baird Private Wealth Management.

He said investors are still trying to gauge how long the conflict will last.

The decline in stock indices was driven by weakness in several major sectors. The S&P 500’s industrials, materials, and health care sectors respectively fell by more than 2%.

On the other hand, the decline was briefly steadied by gains in energy and technology shares. The energy sub-index in the S&P 500 rose 0.6% on expectations of higher earnings due to higher energy prices. Chevron shares surged 3.9%.

Technology shares in the S&P 500 also rose 0.4%. Chip designer Broadcom jumped 4.8% after projecting AI chip revenue could exceed $100 billion next year.

Also read: Wall Street Ends Higher, After Iran-Israel War Shakes Market