Oil Price Spike and Weak Earnings Send Wall Street into the Red

Wall Street took a hit on Wednesday due to geopolitical tensions and weak corporate earnings.

The Dow Jones Industrial Average plummeted by 464.02 points, or 0.85%, to close at 53,885.10, snapping a five-session winning streak.

The sell-off was primarily driven by the threat of an Iranian blockade on the Strait of Hormuz, which sent crude oil prices soaring. West Texas Intermediate (WTI) crude futures settled 2.8% higher at $77.29 a barrel, while global benchmark Brent crude jumped 3.8% to $82.48 a barrel.

Certainly tempering the risk-off mood were reports that Iran and Oman are close to a temporary agreement to resume vessel traffic through the Strait of Hormuz, without imposing transit fees on ships. However, market participants remain wary due to unresolved issues surrounding tolls on passing vessels.