Dow closes down 785 points as selloff sends stocks tumbling

The Dow Jones Industrial Average on Thursday closed down 785 points as the war with Iran escalated and oil prices continued to climb.

The Dow fell 1.61% while S&P 500 dropped 0.57%. The tech-heavy Nasdaq declined 0.26%.

Investors erased stock gains added a day earlier, resuming market turmoil set off by the U.S.-Israeli attack on Iran over the weekend.

Oil prices jumped as traders feared a prolonged blockade of the Strait of Hormuz, a trading route that facilitates the transport of about one-fifth of global oil supply.

U.S. crude oil prices topped $79 on Thursday, hitting their highest level since June.

Gas prices in the U.S. rose to $3.25 cents per gallon, jumping nearly 9% from a week earlier, AAA data showed.

Markets appeared to settle after President Donald Trump posted a message on social media ordering the federal government to provide “political risk insurance and guarantees for the Financial Security of ALL Maritime Trade.”

“If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz, as soon as possible,” Trump added.

Unrest persisted in the Strait of Hormuz in recent days, however, threatening to lift prices for oil and a host of other goods dependent on diesel-fueled transport.

U.S. Treasury yields climbed on Thursday, suggesting possible concern about economic instability and inflation stemming from the Iran war.

Since bonds pay a given investor a fixed amount each year, the specter of inflation risks higher prices that would eat away at those annual payouts.

In turn, bonds often become less attractive in response to economic turmoil. When demand falls, bond yields rise.