Dow Jones tumble 600 points as Trump signals Iran escalation, oil surges

US stocks opened lower on Thursday, the final session of a holiday-shortened week, after President Donald Trump signaled an escalation in the Iran conflict, dampening hopes for a near-term resolution and pushing oil prices higher.

The Dow Jones Industrial Average fell about 637 points, or 1.3%, while the S&P 500 declined 1.3% and the Nasdaq 100 dropped 1.74%.

Escalation fears weigh on sentiment

In a closely watched address on Wednesday, Trump indicated that military operations against Iran would intensify in the coming weeks, reversing earlier expectations of a swift withdrawal.

“Over the next two to three weeks, we’re going to bring them back to the stone ages where they belong,” the president said.

The remarks came shortly after Trump had suggested the US could be “out of Iran pretty quickly,” creating uncertainty around the trajectory of the conflict.

Markets, which had recently rallied on hopes of de-escalation, reacted negatively to the shifting tone.

Wall Street’s volatility gauge, the CBOE VIX index, rose to 27.54 points after dipping to a one-week low in the previous session, reflecting rising investor anxiety.

Oil surge and Fed outlook

Oil prices surged in response to the heightened geopolitical tensions. Brent crude climbed about 7% to above $108 per barrel, while West Texas Intermediate crude jumped 12% to above $112 per barrel.

The sharp move in energy markets lifted oil-linked stocks, with Exxon Mobil and Chevron gaining roughly 2.5% and 3% respectively.

Other energy companies, including APA, ConocoPhillips, Devon Energy, and Occidental Petroleum, posted gains of 3–4%.

Rising energy prices have also shifted expectations for monetary policy.

According to CME Group’s FedWatch Tool, traders are no longer pricing in any rate cuts from the Federal Reserve, compared with expectations for two cuts before the conflict began.

Stocks, data and sector moves

The Middle East conflict had already rattled markets in March, with the S&P 500 and Nasdaq posting their largest monthly losses in a year, while Brent crude recorded its strongest monthly performance on record.

Despite the broader risk-off sentiment, some sectors and stocks saw notable movement.

Shares of Globalstar jumped 9% at market open after reports that Amazon is in talks to acquire the low-Earth orbit satellite company.

Investor attention also turned to SpaceX, which confidentially filed for a US initial public offering, reportedly targeting a $1.75 trillion valuation.

The development boosted smaller space-related companies such as Rocket Lab, Planet Labs, and Intuitive Machines in the previous session.

On the macro front, data showed that initial jobless claims fell to 202,000 for the week ended March 28, below economists’ expectations of 212,000.

Investors are now looking ahead to the nonfarm payrolls report due Friday, though US markets will be closed for the Good Friday holiday.

Traders are also awaiting remarks from Dallas Federal Reserve President Lorie Logan later in the day for further clues on the policy outlook.

With geopolitical uncertainty intensifying and oil prices surging, markets appear set for renewed volatility as investors reassess risk and growth expectations.