US sharemarkets fell on Thursday as renewed concerns over the conflict involving Iran pushed oil prices sharply higher and unsettled investors. The Dow Jones Industrial Average dropped 784 points, or 1.61%, to close at 47,954.74. The S&P 500 declined 0.56% to 6,830.71, while the Nasdaq Composite slipped 0.26% to finish at 22,748.99.
Energy prices were the key driver of the session. US crude oil surged above US$80 a barrel, reaching its highest level since July 2024, after reports that Iran had struck an oil tanker with a missile. West Texas Intermediate settled up more than 8% at US$81.01, while Brent crude rose nearly 5% to US$85.41. At one stage, the Dow briefly fell more than 1,100 points as oil prices climbed.
Cyclical stocks lead declines
The sell-off was led by industrial and cyclical stocks that are sensitive to economic growth. Shares of Boeing and Caterpillar were among the biggest declines as investors worried that sustained higher oil prices could slow global growth. Most sectors in the S&P 500 finished lower, with materials and industrials among the weakest.
The surge in oil also pushed Treasury yields higher and raised concerns that inflation pressures could persist. Energy stocks were one of the few areas to hold up during the session. Berkshire Hathaway was a notable gain, rising more than 2% after the company disclosed it had resumed share buybacks and after chief executive Greg Abel purchased additional shares.
Australian market outlook
Australian shares are set to fall at the open, tracking weakness on Wall Street and the sharp rise in oil prices. ASX 200 futures were down 125 points, or 1.4%, to 8,801.
While there is no major local economic data scheduled for release on Friday, global markets will be watching key US indicators due early Saturday AEDT, including February non-farm payrolls and retail sales, which may provide further insight into the strength of the US economy.
