US stocks crash at open: Dow slips 500 points, S&P down 1%

US stocks declined Thursday as oil prices extended their rally amid escalating conflict involving Iran and growing concerns about disruptions to global energy supplies.

The Dow Jones Industrial Average dropped 547 points, or 1.2%. The S&P 500 fell around 1%, while the Nasdaq Composite declined 0.9%.

The market weakness came as crude oil continued to climb following warnings that shipping through the Strait of Hormuz remains heavily disrupted.

Chris Wright, the US Energy Secretary, told CNBC that the United States Navy is currently “not ready” to escort oil tankers through the Strait of Hormuz, though he said the capability could be in place by the end of the month.

Oil climbs toward $100

Oil markets reacted strongly to the ongoing disruptions.

West Texas Intermediate crude futures jumped about 6% to around $93 per barrel, while Brent crude advanced roughly 6% to about $98 per barrel and briefly touched the $100 level again.

Shipping traffic in the Strait of Hormuz — a key route for global energy supplies — has nearly halted as hostilities intensify.

Authorities reported that three additional foreign vessels were struck overnight in the Persian Gulf.

The incidents followed earlier attacks Wednesday involving three other ships, including one in the Strait of Hormuz itself.

Meanwhile, US forces earlier this week reportedly sank 16 Iranian vessels suspected of laying mines near the strait.

To support maritime traffic, Chubb was named the lead underwriter for a US government-backed insurance program designed to cover ships attempting to navigate the strait.

Iranian leadership escalates rhetoric

Oil prices extended gains after comments from Mojtaba Khamenei, who recently assumed the role of Iran’s supreme leader following the death of his father, Ali Khamenei.

Ali Khamenei was killed during US-Israeli air strikes launched in late February.

In televised remarks translated by Reuters, Mojtaba Khamenei said US military bases across the Middle East should be closed immediately and warned that they could face attacks.

He also said the closure of the Strait of Hormuz should continue as a means of pressuring adversaries.

“Iran will not refrain from avenging the blood of its martyrs,” Khamenei said.

Energy stocks gain while tech falls

Rising oil prices supported energy companies even as the broader market declined.

Shares of Chevron and Exxon Mobil were among the few stocks trading higher during the session.

By contrast, technology and financial shares were broadly weaker.

Morgan Stanley led losses among financial stocks after restricting withdrawals from a private credit fund.

Despite the recent pullback, the S&P 500 remains only about 3.2% below the record high reached in January.

Economic data provides mixed signals

New economic data released Thursday offered a mixed picture of the US economy.

Initial jobless claims came in at 213,000 for the week ended March 7, according to the US Department of Labor.

The figure was down 1,000 from the previous week and below the Dow Jones forecast of 215,000.

Continuing claims fell by 21,000 to 1.85 million.

Meanwhile, the US Department of Commerce reported that the US trade deficit narrowed sharply to $54.5 billion in January, a drop of $18.4 billion from the prior month and significantly below forecasts of $67 billion.

The data covers the period before a United States Supreme Court ruling that struck down several tariffs imposed by the Trump administration.