US Strikes Iran, Sending Oil Prices Soaring and Wall Street into Decline

US strikes on Iranian military sites have sent Wall Street into a decline, as oil prices surged to new highs and investors bet on a Federal Reserve rate hike later this month.

The conflict has been ongoing for six months, with the US, Israel, and Iran engaging in a series of attacks and counterattacks. On Tuesday, the US launched airstrikes against Iranian Revolutionary Guard Corps positions in the country's south, just hours after two oil tankers were struck by unidentified projectiles as they left the strait.

The renewed fighting has sent energy markets into a frenzy, with Brent crude climbing towards $95 a barrel and US crude trading in the high $80s. The S&P 500 and Nasdaq Composite indexes fell sharply, with the Dow Jones Industrial Average giving up roughly 400 points at its weakest point of the day.

The Federal Reserve's hawkish tone has also contributed to the market volatility, with investors pricing in a higher likelihood of a rate hike later this month. The yield on the 10-year Treasury note pushed above 4.75%, its highest level since January 2025.