Oil prices leap 7% and US stocks slump more than 1% on worries about the
crude market
[June 14, 2025] By
STAN CHOE, DAVID McHUGH and JIANG JUNZHE
NEW YORK (AP) — Oil prices leaped, and stocks slumped Friday on worries
that escalating violence following Israel’s attack on Iranian nuclear
and military targets could damage the flow of crude around the world,
along with the global economy.
The S&P 500 sank 1.1% and wiped out what had been a modest gain for the
week. The Dow Jones Industrial Average dropped 769 points, or 1.8%, and
the Nasdaq composite lost 1.3%.
The strongest action was in the oil market, where the price of a barrel
of benchmark U.S. crude jumped 7.3% to $72.98. Brent crude, the
international standard, rose 7% to $74.23 for a barrel.
Iran is one of the world’s major producers of oil, though sanctions by
Western countries have limited its sales. If a wider war erupts, it
could slow the flow of Iran’s oil to its customers and keep the price of
crude and gasoline higher for everyone worldwide.
Beyond the oil coming from Iran, analysts also pointed to the potential
for disruptions in the Strait of Hormuz, a relatively narrow waterway
off Iran’s coast. Much of the world’s oil that's been pulled from the
ground moves through it on ships.
Past attacks involving Iran and Israel have seen prices for oil spike
initially, only to fall later “once it became clear that the situation
was not escalating and there was no impact on oil supply,” according to
Richard Joswick, head of near-term oil at S&P Global Commodity Insights.
That has Wall Street waiting to see what will come next. U.S. stock
prices dropped to their lowest points for the day after Iran launched
ballistic missiles toward Israel.
For now, the price of oil has jumped, but it’s still lower than it was
earlier this year. “This is an economic shock that nobody really needs,
but it is one that seems more like a shock to sentiment than to the
fundamentals of the economy,” said Brian Jacobsen, chief economist at
Annex Wealth Management.
That in turn sent U.S. stocks to a loss that was notable in size but
outside their top 15 for the year so far.
Companies that use a lot of fuel as part of their business and need
their customers feeling confident enough to travel fell to some of the
sharpest losses. Cruise operator Carnival dropped 4.9%. United Airlines
sank 4.4%, and Norwegian Cruise Line Holdings fell 5%.
They helped overshadow gains for U.S. oil producers and other companies
that could benefit from increased fighting between Israel and Iran.
Exxon Mobil rose 2.2%, and ConocoPhillips gained 2.4% because the
leaping price of crude portends bigger profits for them.
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Trader Steven Gohl works on the floor of the New York Stock
Exchange, Tuesday, June 10, 2025. (AP Photo/Richard Drew)
 Contractors that make weapons and
defense equipment also rallied. Lockheed Martin, Northrop Grumman
and RTX all rose more than 3%.
The price of gold climbed as investors searched for safer places to
park their cash. An ounce of gold added 1.4%.
Often, prices for Treasury bonds will likewise rise when investors
are feeling nervous. That’s because U.S. government bonds have
historically been seen as some of the safest options around. But
Treasury prices fell Friday, which in turn pushed up their yields,
in part because of worries that a spike in oil prices could drive
inflation higher.
Inflation has remained relatively tame recently, and it’s near the
Federal Reserve’s target of 2%, but worries are high that it could
be set to accelerate because of President Donald Trump’s tariffs.
That sent the yield on the 10-year Treasury up to 4.41% from 4.36%
late Thursday. Higher yields can tug down on prices for stocks and
other investments, while making it more expensive for U.S. companies
and households to borrow money.
A better-than-expected report Friday on sentiment among U.S.
consumers also helped drive yields higher. The preliminary report
from the University of Michigan said sentiment improved for the
first time in six months after Trump put many of his tariffs on
pause, while U.S. consumers’ expectations for coming inflation
eased.
On Wall Street, Adobe fell 5.3% even though the company behind
Photoshop reported a stronger profit for the latest quarter than
Wall Street expected. Analysts called it a solid performance but
said investors may have been looking for some bigger revenue
forecasts for the upcoming year.
All told, the S&P 500 fell 68.29 points to 5,976.97. The Dow Jones
Industrial Average dropped 769.83 to 42,197.79, and the Nasdaq
composite sank 255.66 to 19,406.83.
In stock markets abroad, indexes slumped across Europe and Asia.
France’s CAC 40 lost 1%, and Germany’s DAX dropped 1.1% for two of
the larger losses.
___
McHugh reported from Frankfurt, Germany, and Junzhe reported from
Hong Kong. AP Business Writers Matt Ott and Dee-Ann Durbin
contributed.
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