Stock Market Today, March 12: Oil Prices Surge After Iran War Fears Spark Broad Market Selloff

The S&P 500 (^GSPC 0.55%) fell 1.52% to 6,672.62, the Nasdaq Composite (^IXIC 0.99%) slid 1.78% to 22,311.98, and the Dow Jones Industrial Average (^DJI 0.15%) dropped 1.56% to 46,677.86 as surging oil and Iran war fears fueled broad risk-off selling.

Market movers

Oil-linked names and defensives outperformed while travel, tech, and staples sank. Airline stocks such as Delta Air Lines (DAL +0.17%) slumped on fuel cost worries, cloud player Netskope (NTSK +0.47%) tumbled after its IPO lockup expiry, and gold miner Harmony Gold (HMY 5.26%) slid despite hiking its dividend.

What this means for investors

As of this writing, WTI crude oil futures were up 10% to about $96 per barrel. The latest spike came after Iran attacked several ships in the Persian Gulf and the International Energy Agency (IEA) called it the “largest supply disruption” ever. The move in oil came despite the 32-member countries of the IEA deciding to release 400 million barrels of oil from emergency reserves, the largest such action in history.

Tensions rose after newly appointed Iranian leader, Mojtaba Khamenei, declared on Thursday that maintaining the closure of the Strait of Hormuz maritime passage should serve as a “tool to pressure the enemy.” This marks his first public statement since assuming the position.

These events led to a rotation away from sectors including travel, transportation, tech and consumer names, and into energy-focused names. Investors should expect volatility to continue until the Middle East conflict is resolved.