U.S. stocks down, oil down $108 - after Israeli attack on Iran gas field

Major U.S. stock indices opened in the negative zone on March 18. Brent oil jumped to $108 per barrel after Iran's statements about Israeli strikes on an Iranian gas field, as well as after the data on wholesale inflation in the U.S. was higher than expected, Bloomberg writes.

- Against this background, the broad market index S&P 500 fell in early trading on March 18 by 0.26%, within an hour the decline accelerated to 0.69%.

- The blue-chip index Dow Jones Industrial Average fell by 0.3% in the first minutes, an hour later it is down 0.91%.

- The technology sector index Nasdaq Composite fell 0.3%, an hour after the opening of the session it had already lost 0.72%.

- The index of small and medium capitalization companies Russell 2000 was the only one among the major stock indices that added 0.67% in the first minutes of trading on March 18, but then also fell into the red zone - by minus 0.89%.

- The CBOE Volatility Index, known as the Wall Street Fear Index, rose 3.8% to 23.2 points. The index has been above the psychological mark of 20 points for more than two weeks, indicating increased volatility in the market.

- Brent crude futures were up 4.45% to $108 per barrel. U.S. WTI crude was up 1.9% to $97.99 per barrel. Oil prices rose amid reports that Israel has struck Iran's gas infrastructure, CNBC noted. According to the Jerusalem Post, the strike hit Iran's gas infrastructure in the South Pars and Asaluyeh regions.

- Spot gold prices fell 3% to $4854.7 an ounce, while silver also fell 3.4% to $76.6.

- Bitcoin was down 2.3 percent at around $72306, CoinGecko data showed.

The markets demonstrate such dynamics against the background of the ongoing escalation of the conflict in the Middle East. According to Times of Israel and Jerusalem Post, Israel struck facilities at the Iranian gas field South Pars. In response, Iran has threatened to attack the oil infrastructure of Saudi Arabia, the UAE and Qatar, CNBC writes. According to the channel, in particular, the Samref refinery and the Al-Jubail petrochemical complex in Saudi Arabia, the Al Hosn gas field in the UAE, and the Mesaieed petrochemical complex in Qatar.

"Markets remain tense: every news from the Middle East causes a sharp reaction," Bloomberg quotes Jay Woods, chief market strategist at Freedom Capital Markets, as saying. According to him, the overall trend remains downward, despite the relative stability of the market.

Additional pressure on the stock market on March 18 was exerted by inflation data: the producer price index (PPI) in the U.S. rose 0.7% in February, indicating that price pressures were intensifying even before the conflict in the Middle East, CNBC writes.

Citi believes that the oil market will remain under pressure in the short term. In the baseline scenario, supply disruptions through the Strait of Hormuz over the next 4-6 weeks could lead to a drop in the market from 11 million to 16 million barrels per day, which would push Brent oil prices to the level of $110-$120 per barrel, CNBC points out. In a more negative scenario, according to Citi - with prolonged outages or expanding attacks on energy infrastructure - oil prices could average $130 a barrel in the second and third quarters of 2026, with possible Brent spikes to $150 or even $200.

This article was AI-translated and verified by a human editor