Dow drops 1,100 points as oil surges, bond yields climb in response to deepening Iran conflict

U.S. equities tumbled on Tuesday, undoing a Monday equity comeback, as oil prices spiked again and traders began to worry the U.S.-Iran conflict could drag on longer than anticipated.

The Dow Jones Industrial Average lost 1,135 points, or 2.3%. If that holds, it would mark the blue-chip index’s first 1,000-point decline since April 10, 2025. The S&P 500 slipped 2.2%, while the Nasdaq Composite was down 2.3%.

Brent crude oil, the international benchmark, topped $84 a barrel, up 8% Tuesday following a 6% spike Monday. WTI crude jumped 8% to above $77 a barrel after a 6% jump as well on Monday.

Iranian Revolutionary Guard commander said the Strait of Hormuz — the world’s most vital transit route for crude oil — is closed and that Iran would set ablaze ships attempting the route, Reuters reported, citing Iranian media.

President Donald Trump has warned that the conflict could continue for more than four weeks.

The jump in energy prices was boosting Treasury yields on fears it may cause inflation to flare back up, just as U.S. investors are banking on more Federal Reserve rate cuts to boost the economy.