Middle East Tensions Spark Oil Price Surge

New York stocks fell sharply on Thursday as Brent crude oil prices shot up to their highest since May, fueled by increased tensions in the Middle East. The S&P 500 dropped 1.2%, while the Dow Jones Industrial Average lost 506 points and the Nasdaq composite sank 2.2%. Alphabet and Tesla led the losses, with Alphabet's stock falling 7.1% despite a strong profit report.

The price of Brent crude oil rose 7% to $100.69 per barrel after attacks on two Saudi oil tankers in the Red Sea threatened another major shipping route for oil companies. This increase is likely to worsen inflation, which could prompt the Federal Reserve to raise interest rates for the first time since 2023.

Oil prices have jumped significantly since the US and Israel's war with Iran began, from $72 per barrel in mid-June to over $100 today. The higher oil prices are also pushing up long-term U.S. mortgage rates to their highest levels in nearly a year.