U.S. oil prices were approaching $120 a barrel at the beginning of the trading week, sending stock futures plunging, and heightening the risk of higher energy prices slowing down the U.S. economy at an unprecedented pace. The Dow Jones Industrial Average is rolling off its largest weekly loss in almost a year.
Dow-based futures dropped by 1,026 points or 2.33 percent. S&P 500 futures fell 2.05 percent, and Nasdaq 100 futures slipped 2.34 percent.
West Texas Intermediate crude has soared 25 percent to over $113 a barrel, the highest since 2022, when the market was responding to the aftermath of the invasion of Ukraine by Russia. The international Brent crude benchmark gained by 24 percent to over $115 a barrel. The oil prices in the United States started the year at less than $60 per barrel.
Oil futures surged on Sunday night after the largest oil producers in the Middle East reduced production amid the ongoing closure of the Strait of Hormuz, a crucial passageway.
Kuwait announced reductions but did not indicate by what percentage, whereas Iraq has apparently experienced a reduction of 70 percent in production.
However, a $100 oil level was witnessed by several on Wall Street as a breaking point for the economy unless the war is resolved quickly and prices retreat.
Trump shared on Sunday evening that an increase in “short-term oil prices” was a “very small price to pay” for destroying Iran’s nuclear threat.
According to reports, the war did not seem to ease even when Trump told the world the war was already won and that Ayatollah Khamenei’s son, Mojtaba, had become the new supreme leader of the country.
The movements of Sunday are an extension of a bad week on Wall Street as the U.S.-Iran war resulted in crude prices soaring. U.S. crude rose above 35 percent last week, the largest overall weekly jump in its history since the futures contract started trading in 1983.
The Dow tumbled approximately 3 percent last week, the worst weekly loss since early April 2025, when President Donald Trump first announced its tariffs sent ripples through markets. The broad S&P 500 shed 2 percent, while the Nasdaq Composite ended the week 1.2 percent lower.
BlackRock CIO Rick Rieder wrote to clients on Friday, “Markets are clearly jittery as the impact and duration of the war in the Mideast are very uncertain, with a potentially wide range of outcomes for economies and important market influences. These events are creating some extreme movements in areas of the markets as market participants are clearly looking to reduce overweight positions or hedge embedded risk.”
No economic figures of note are scheduled to be released on Monday, although investors will monitor releases on inflation, employment, and gross domestic product that are being released throughout the week.
Investors will observe Hewlett Packard Enterprise profits at the bell on Monday, and Kohl’s and Oracle, among others, and Dollar General and Dick’s Sporting Goods later in the week.
President Donald Trump called rising oil prices a “very small price to pay” Sunday night after West Texas Intermediate. Crude futures reached above $100 per barrel for the first time since 2022.
Trump wrote on Truth Social, “Short-term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, are a very small price to pay for U.S.A., and World, Safety and Peace.”
Trump added, “ONLY FOOLS WOULD THINK DIFFERENTLY!”
Crude oil prices surged over $100 a barrel following massive production reductions in the major producers in the Middle East after the Strait of Hormuz remained shut down due to the Iran war.
West Texas Intermediate soared 11.73 percent to $101.56 per barrel, while global benchmark Brent jumped 9.84 percent to $101.81. U.S. crude oil increased about 35 percent last week in its biggest gain in futures trading history dating back to 1983.
Stock futures plunged on Sunday night as oil’s continued ascent hung over investors. Dow futures fell over 600 points around 6 p.m. ET. S&P 500 futures were down nearly 1.5 percent, and Nasdaq 100 futures were down nearly 1.5 percent.
Wall Street is also suffering after spending a tumultuous week, as the Dow experienced its largest weekly loss since April.
