- U.S. stock indexes were headed for a fifth straight week of losses and crude oil was back up over $110 barrel.
- Dour economic impacts of the Iran war continue in spite of President Trump extending a deadline.
- New projections see higher U.S. inflation and more costly basic necessities this year
Just a day after the S&P 500 rode out its worst session since the Iran war started, U.S. stock indexes were on the decline Friday and oil prices on the rise even as President Donald Trump extended a deadline on threats to target critical Iranian energy facilities if the country failed to re-open the Strait of Hormuz.
As of midday Friday, the Dow Jones Industrial Average had lost over 300 points, around 0.7%, the S&P 500 was down 0.7% and the Nasdaq Composite had slipped by 1.1%.
Benchmark Brent crude oil was trading for over $110 per barrel, on the rise again as earlier price relief, driven in part by Trump’s assertions that peace talks had begun last weekend, disappeared amid ongoing military strikes and claims from Iran that no negotiations have taken place.
“The diplomatic dissonance this week between the U.S. and Iran dismayed investors,” Doug Beath, global equity strategist at Wells Fargo Investment Institute, told the Associated Press. “By the end of the week, risk appetite could not withstand the fog of war.”
On Thursday, Trump announced on social media that he was extending a deadline to attack Iran’s energy infrastructure to April 6, just over a week after the original deadline that was set to end Friday.
“As per Iranian Government request, please let this statement serve to represent that I am pausing the period of Energy Plant destruction by 10 Days to Monday, April 6, 2026, at 8 P.M., Eastern Time,” Trump wrote on Truth Social. “Talks are ongoing and, despite erroneous statements to the contrary by the Fake News Media, and others, they are going very well.”
If the war continues until the end of June, strategists at Macquarie say the price of oil could reach $200 per barrel, per AP. The record is just above $147, reached during the summer of 2008 when Iran’s testing of missiles, including one that could reach Israel and strong demand for oil from China, helped send prices spiking despite the Great Recession.
The broader impacts of the Iran war
Beside higher gas prices, economists say the longer the military hostilities in the Middle East continue the more severe the impacts will be on the U.S. economy.
A new forecast from the Organization for Economic Cooperation and Development projects U.S. inflation will rise to 4.2% in 2026, far ahead of the 2.68% average rate throughout 2025.
“The evolving conflict in the Middle East has human and economic costs for the countries directly involved, and will test the resilience of the global economy,” the report reads. “A halt in shipments through the Strait of Hormuz and the closure or damage of energy infrastructure has generated a surge in energy prices and disrupted the global supply of energy and other important commodities, such as fertilizers.
“The breadth and duration of the conflict are very uncertain, but a prolonged period of higher energy prices will add markedly to business costs and raise consumer price inflation, with adverse consequences for growth.”
Gasoline prices have risen sharply, around 30%, since the U.S. and Israel launched attacks on Iran late last month, Diesel fuel, which powers trucks and other vehicles that transport raw materials, consumer goods, agricultural products and much more around the world, is up even more at 50% higher than before the conflict began.