Oil surged past $113 per barrel and U.S. stocks tumbled sharply Thursday as markets reacted to President Donald Trump's Iran war address, which offered no clear path to de-escalation. The Dow Jones Industrial Average dropped 625 points, the Nasdaq Composite fell 1.8%, and the Russell 2000 declined 1.6%. While Trump stated the conflict would end "shortly," he also announced plans for additional "extremely hard" strikes over the next two to three weeks, without detailing a ceasefire framework or a strategy to reopen the Strait of Hormuz. More than 20% of the world's oil passes through the strait, and its closure has tightened global supply. Trump claimed the waterway would "open up naturally," a statement that did little to calm investor anxiety. U.S. crude rose 12% to over $113 a barrel, while Brent crude jumped 8% to $109. Gas prices across the U.S. climbed to a national average of $4.08 per gallon, up from $2.98 before the conflict began. Heating oil and natural gas prices also increased. Analyst Patrick De Haan noted that consumers would start feeling the price surge at gas stations by midday Thursday. UBS Global Wealth Management's chief investment officer, Paul Donovan, said markets had expected a de-escalation signal, but instead faced the risk of Iranian retaliation and further damage to Gulf energy infrastructure. British Foreign Secretary Yvette Cooper led a video call with 35 nations, including Gulf states, to discuss reopening the strait, but the U.S. did not participate. Cooper suggested military de-escalation must precede any deployment of joint defensive forces. U.S. Treasury yields rose, with the 10-year note hitting 4.37%, pushing the average 30-year mortgage rate to 6.45%, up from 5.99% before the war. Bank of America warned the Fed's preferred inflation measure, PCE, could peak near 4% this quarter, up from 2.8% in January. Eurozone inflation jumped to 2.5% in March from 1.9% the prior month. Trading ended Thursday ahead of the Good Friday market closure, with investors offloading positions ahead of the long weekend amid fast-moving geopolitical developments.
When Trump says the war will end "shortly" but schedules more "extremely hard" strikes, that means escalation is baked into the timeline — not containment. Markets priced in prolonged conflict the moment he ruled out a diplomatic off-ramp or a plan to reopen the Strait of Hormuz. With oil surging and inflation pressures reigniting, central banks may be forced to maintain tight monetary policy even as growth slows. The absence of the U.S. from the 35-nation call underscores a broader retreat from multilateral crisis management at the worst possible moment.
