Oil Price Surge Triggers S&P 500 Decline Amid US-Iran Tensions

The S&P 500 index experienced its worst week since March 2023 due to rising oil prices and higher bond yields, driven by escalating tensions between the U.S. and Iran in the Middle East.

Oil prices surged as renewed fighting between the two nations heightened concerns over energy flows through the Strait of Hormuz. Brent crude hit $95.52 a barrel while West Texas Intermediate rose to $91.02, with Brent gaining around 8% for the week and WTI climbing nearly 10% after the U.S. and Iran resumed attacks.

The 10-year Treasury yield climbed to around 4.79-4.80%, approaching levels not seen in nearly two decades. The bond sell-off that defined the summer gathered fresh momentum, with global bond yields reaching multi-decade highs across the U.S., Europe, and Japan.