U.S. stocks fell sharply Monday as a surge in oil prices rattled investors and raised concerns about rising inflation and slowing economic growth.
Futures tied to the Dow Jones Industrial Average dropped about 1.2%, or nearly 600 points, after plunging more than 1,000 points overnight. Futures for the S&P 500 fell roughly 1.1%, while Nasdaq-100 futures slipped about 1.1% as the week’s trading began.
The sell-off came as oil prices surged above $100 a barrel for the first time in years, driven by supply disruptions linked to tensions in the Middle East.
Oil surge shakes markets
West Texas Intermediate crude climbed to about $103 per barrel after briefly spiking above $119 in overnight trading. Global benchmark Brent crude traded above $107 a barrel.
The dramatic jump in energy prices followed output cuts from major Middle Eastern producers and the continued disruption of shipments through the Strait of Hormuz, a key global oil transit route.
Kuwait confirmed it had reduced production, while reports indicated that output in Iraq had dropped by roughly 70%. The tightening supply helped fuel fears of a prolonged energy shock for the global economy.
Investors worry that sustained oil prices above $100 could push inflation higher while also slowing economic growth – a combination sometimes described as stagflation.
Investors watch for possible emergency oil release
Markets trimmed some earlier losses after reports that leaders from the Group of Seven (G7) major economies are considering releasing oil from emergency reserves to stabilize prices.
According to reports, officials from the United States and several other countries support tapping strategic petroleum reserves through the International Energy Agency.
Meanwhile, former President Donald Trump suggested the spike in oil prices was an acceptable cost for addressing security concerns tied to tensions with Iran.
Stocks extend last week’s losses
Monday’s sell-off followed a rough week for U.S. equities.
The Dow Jones Industrial Average lost about 3% last week, its steepest weekly decline since April 2025. The S&P 500 slid roughly 2%, while the Nasdaq Composite finished down more than 1%.
Financial and industrial stocks led the early declines as investors worried about the potential impact of higher energy costs on corporate profits and economic growth.
Defense and energy companies were among the few sectors trading higher as oil prices climbed.
Key economic data and earnings ahead
Investors are also watching several key economic reports this week.
On Wednesday, the Consumer Price Index will provide a new snapshot of inflation. Later in the week, the Personal Consumption Expenditures index – a key inflation gauge used by the Federal Reserve – is scheduled for release on Friday.
The impact of the recent oil surge may not fully appear in those reports yet, but analysts say energy costs could soon influence inflation data if prices remain elevated.
Corporate earnings are also in focus, with Hewlett Packard Enterprise expected to report results after Monday’s closing bell. Other major companies scheduled to release earnings this week include Oracle, Adobe and Dick’s Sporting Goods.
With geopolitical tensions and energy markets dominating headlines, investors are bracing for continued volatility in the days ahead.
