U.S. equities retreat and oil surges after Iran signals potential escalation in the Strait of Hormuz following failed negotiations.
The Dow Jones Industrial Average fell 260 points, or 0.5%, to close below 53,500 as a 60-day negotiating window over the Strait of Hormuz expired without agreement. Treasury yields hit 19-year highs, amplifying pressure on equities as geopolitical risks intensified.
Iranian officials warned of shifting from defensive to offensive measures if diplomacy fails, while the Revolutionary Guard reiterated control over vessel transit. Daily crossings plummeted to three from a pre-conflict average of 130, disrupting global oil flows.
Crude oil prices jumped 3%, with WTI surpassing $83.00 and Brent exceeding $88.00. Refiners like Valero (VLO) traded near record levels as the market priced in prolonged supply risks.