US stocks ended lower Thursday as investors grew increasingly concerned over the escalating conflict in the Middle East and its potential impact on global energy supplies and inflation.
The Dow Jones Industrial Average fell 1.61%, or 784.67 points, to close at 47,954.74.
The Nasdaq composite declined 0.26%, or 58.50 points, to 22,748.99, while the S&P 500 slipped 0.56%, or 38.79 points, to 6,830.71.
The Volatility Index (VIX), often referred to as the market’s “fear gauge,” climbed 12.29% to 23.75.
Markets remained under pressure as the conflict between Iran and the US and Israel intensified and concerns mounted that disruptions to energy shipments could reverberate across global trade and financial markets.
Iranian Foreign Minister Abbas Araghchi said Thursday that Iran is “not asking for a ceasefire” from the US and Israel, adding that “we don’t see any reason why we should negotiate.”
Oil prices extended their rally after Iranian authorities announced the closure of the Strait of Hormuz, warning that vessels attempting to pass through the strategic waterway could be targeted.
The strait is one of the world’s most critical energy transit routes, carrying roughly one-fifth of global oil consumption.
Brent crude was up more than 5% at $81.70 per barrel, while West Texas Intermediate (WTI) crude rose over 4% to $74.50 per barrel.
Analysts warned that sustained increases in oil prices could add to inflationary pressures and complicate the US Federal Reserve’s policy outlook.
The central bank is already navigating uncertainty stemming from tariffs and geopolitical risks. Investors are also closely monitoring comments from Federal Reserve officials for further signals on the interest rate path.
Separately, OpenAI CEO Sam Altman criticized rival artificial intelligence firm Anthropic on Thursday, arguing that it would be harmful for society if companies distance themselves from democratic institutions simply because they disagree with the political leadership, CNBC reported.
Speaking at the Morgan Stanley Technology, Media & Telecom Conference, Altman said governments should ultimately hold more authority than private corporations.
Federal Reserve officials’ comments continued to be closely monitored as markets assessed the potential economic impact of the US-Israeli conflict with Iran.
In an interview with Bloomberg Television, Richmond Fed President Tom Barkin said the central bank’s response would largely depend on how long the conflict affects the US economy.
Barkin noted that rising gasoline prices represent an inflationary pressure. He explained that monetary policy typically looks past short-term shocks but must respond if the effects become persistent, suggesting policymakers will need to carefully assess whether the situation has longer-term implications.
He also recalled that the Fed’s interest rate cuts last year were based on the view that risks to the labor market were rising while inflation risks were easing. However, Barkin said recent data suggests that trend may now be reversing.
On the macroeconomic front, initial jobless claims in the US stood at 213,000 for the week ending Feb. 28, unchanged from the previous week and below market expectations.
Meanwhile, US nonfarm business sector labor productivity rose by 2.8% in the fourth quarter of 2025 compared to the 5.2% increase seen in the third quarter, surpassing forecasts.
Unit labor costs—an inflation indicator closely tracked by the Fed—also increased by 2.8% in the October-December period from the prior quarter, coming in above expectations.
Separately, the US import price index rose 0.2% in January on a monthly basis, while the export price index climbed 0.6%.
Analysts said investors are now turning their attention to the upcoming nonfarm payrolls report, which is expected to provide further insight into the strength of the US labor market.
By Mucahithan Avcioglu
Anadolu Agency
energy@aa.com.tr
