US markets experienced their steepest decline since the beginning of the US-Israel conflict with Iran on Thursday, as President Donald Trump made comments about oil prices and negotiations. The Dow Jones Industrial Average closed 450 points lower, while the S&P 500 fell 1.7%. The tech-heavy Nasdaq dropped 2.3%, entering correction territory, defined as a decline of at least 10% from a recent peak.
Oil prices have surged since the conflict began, reaching levels not seen since Russia's invasion of Ukraine in 2022-2023. Brent crude, the global benchmark, settled at around $107 per barrel on Thursday, while US crude hit $93 per barrel. Average US petrol prices reached $3.98 per gallon, according to AAA.
Despite the price increases, Trump said during a cabinet meeting that oil prices “have not gone up as much as I thought” and predicted they would “come back down to where it was, and probably lower.” He also expressed confidence that the stock market would recover once the conflict ends.
Markets have grown wary of Trump's mixed signals on negotiations with Iran. Stocks dipped on Thursday morning after Trump warned Iranian negotiators to “get serious, before it’s too late,” adding that “there is NO TURNING BACK, and it won’t be pretty!” However, later he claimed there were “very substantial talks” and that Iran allowed 10 oil tankers to pass the Strait of Hormuz, calling it a “present” from Iran.
After markets closed, the White House announced a 10-day extension of the pause on strikes against Iranian energy infrastructure, until 6 April. Trump wrote on social media that talks are “going very well,” despite “erroneous statements to the contrary.”
Meanwhile, the OECD released a report estimating US inflation will average 4.2% this year, up from about 2.6% in 2025, reversing expected strong global growth. The report noted that higher oil prices, particularly affecting fertiliser imports from the region, are a key factor. “The evolving conflict in the Middle East has human and economic costs... and will test the resilience of the global economy,” it stated.
