US Equity Indexes Slump as Surging Crude Oil, Treasury Yields Trigger Inflation Concerns

01:55 PM EDT, 03/12/2026 (MT Newswires) -- US equity indexes dropped after midday Thursday as Iran's threat to keep the Strait of Hormuz shut lifted crude oil prices and fueled inflationary concerns.

The Nasdaq Composite slumped 1.4% to 22,395.2, with the S&P 500 down 1.1% to 6,697.5 and the Dow Jones Industrial Average lower by 1.3% to 46,825.5.

Energy and utilities led the gainers intraday. Industrials, consumer discretionary, and communication services were among the decliners.

West Texas Intermediate crude oil futures jumped 9% to $95.09.

Oil prices climbed after Iran's new supreme leader, Mojtaba Khamenei, issued his first public message, warning that the Strait of Hormuz will remain closed as a "tool of pressure," CNN reported.

Read on Iranian state television by an anchor, the message also said that all US bases in the region "will be attacked" unless they shut down, the news report said.

"There are no indications yet that the US Navy is poised to commence an operation to ensure freedom of navigation through the critical waterway," Helima Croft, head of global commodity strategy and MENA research at RBC Capital Markets, wrote in a note. "Meanwhile, the risk to tankers and ports appears to be rising by the day."

Higher oil prices will likely result in a stronger core and headline consumer price index in the coming months, with the near-term impact concentrated on the pass-through from gasoline prices, Macquarie said in a Wednesday note. Based on the US Energy Information Administration's general guideline, a $10 jump in crude would translate into a $0.24 increase in the price of gasoline per gallon.

If current pricing persists, it will boost headline consumer price inflation by 0.6 percentage points and headline personal consumption expenditures by 0.4 percentage points in the near term, according to Macquarie.

Most US Treasury yields rose, with the 10-year yield up 4.3 basis points to 4.25%. The two-year yield jumped 10.5 basis points to 3.74%.

In company news, Fair Isaac (FICO) said late Wednesday it priced $1 billion of 6.25% senior notes due 2034 in a private offering. Its shares slumped 7.4%, the second-worst decline in the S&P 500.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.