US stocks moved lower on Thursday as a sharp rise in oil prices renewed concerns about inflation, growth, and funding conditions. The selloff followed fresh comments from Iran’s Supreme Leader, Mojtaba Khamenei, who said the Strait of Hormuz should stay closed, adding to fears of a longer supply shock in global energy markets.

Brent crude traded near $100 a barrel after touching that level earlier, while West Texas Intermediate climbed above $94. At the same time, weekly US jobless claims came in at 213,000, slightly below expectations, keeping attention on how the Federal Reserve may respond to higher energy costs.

The trading opened as an extension of the risk-off sentiment that was seen across various asset classes. The S&P 500 declined by about 1%, the NASDAQ 100 slipped close to 0.9% and the Dow Jones Industrial Average dropped by more than 1%. The European stocks also declined as the dollar strengthened and the yields on the ten-year Treasury climbed. This was as the oil prices surged and the long bonds faced pressure.

Oil Prices Drive the Market Mood

The main catalyst for the decline came from the oil market. Traders reacted to signs that the Iran conflict continues to interrupt crude flows and shipping routes across the Gulf. Brent rose to about $98.45 and briefly crossed $100, while WTI climbed above $93. Iran’s latest attacks on shipping and infrastructure added to concerns that the Strait of Hormuz could stay partly blocked for longer than markets had expected.

The International Energy Agency said the current situation has created major turmoil in oil markets. The March 2026 Oil Market Report, published on March 12, described a major supply shock as conflict-related interruptions spread across the region. This matters because the Strait of Hormuz is one of the world’s most important oil transit routes, so any sustained closure can quickly push energy prices higher and lift inflation risks worldwide.

Goldman Sachs added to those concerns by warning that oil prices could move above previous record highs if flows through Hormuz are heavily depressed across March. The bank also raised its forecasts for Brent and WTI for Q4, citing a longer supply interruption than it had previously expected. This warning reinforced the broader market view that oil has become the main driver of short-term price action across equities, bonds, and currencies.

Stocks and Bonds React to Inflation and Funding Risks

Higher oil prices weighed on stocks because investors now face 2 market risks at the same time. The first is inflation. A sustained rise in crude can feed into transport, fuel, and input costs across the economy. The second is financial stress, especially in areas tied to private credit and long-duration assets. Withdrawal limits at private-credit funds linked to Morgan Stanley and Cliffwater added to the weaker tone in financial shares.

Bond markets also sent a clear signal. Instead of a broad rush into long-dated Treasuries, yields moved higher as investors demanded more compensation to hold long-term debt. This reaction suggested the market worries less about a near-term slowdown and more about inflation, heavy issuance, and weaker demand for government bonds. The rise in yields also creates another challenge for equities because higher borrowing costs can reduce valuations, especially in growth sectors.

US labor data did little to change that view. The Labor Department said initial jobless claims fell by 1,000 to 213,000 in the week ended March 7. The result pointed to a labor market that is relatively steady, which may support the case for the Federal Reserve to stay cautious. With oil prices rising again, investors now appear less willing to assume quick policy easing.

Corporate Highlights and Sector Moves

The company has been making active moves even as the broader market stayed under pressure. Some stocks gained on earnings and outlook updates, while others reflected the strain building in credit-sensitive areas. 

Corporate Highlights:

• Blue Owl Capital Inc. said its recent $1.4 billion loan sale from 3 funds included no backstops or hidden incentives, as pressure on private credit stayed in focus.

• Microsoft Corp. and Meta Platforms Inc. each committed nearly $50 billion in additional data center leases in their most recent quarters, highlighting continued artificial intelligence infrastructure spending.

• Eli Lilly & Co. warned that the active ingredient in Zepbound may pose risks when combined with vitamin B12.

• Dick’s Sporting Goods Inc. projected full-year sales growth across its core stores and the recently acquired Foot Locker chain.

• Dollar General Corp. forecast sales largely in line with analyst estimates, pointing to slower momentum after earlier outperformance.

Also Read: US Stock Market Today: Middle East War Hits Stocks as Oil Surge Above $100 Fuels Inflation Fears

Beyond individual names, sector rotation also stood out. Energy, fertilizer, and chemical shares gained as higher crude prices tightened supply expectations. Airlines, cruise operators, and parts of the consumer sector came under pressure as investors assessed the impact of rising fuel costs on margins and spending.