Dow plunges nearly 800 points as inflation fears, Iran war spook Wall Street

• US crude prices jumped 6% to above $79 per barrel, with concerns that prices hitting $100 would further worry markets and potentially force the Fed to delay rate cuts from July to September
• Travel stocks sensitive to energy prices declined, with Delta Air Lines falling 3.3%, while tech stocks showed mixed performance with Nvidia down 0.3%
• Booking stocks surged significantly (Booking Holdings up 11%, Expedia up 8%) after reports that OpenAI was scaling back shopping checkout plans for ChatGPT, easing disruption concerns for internet marketplace businesses

Market Summary: Dow Plunges on Inflation and Geopolitical Concerns

Wall Street indexes declined Thursday as the US-Israeli conflict with Iran entered its sixth day, sparking inflation fears that could complicate Federal Reserve policy. The Dow Jones Industrial Average fell nearly 800 points (1.6%) to 47,949, while the S&P 500 dropped 0.9% and the Nasdaq declined 0.6%.

Key Market Drivers:

The ongoing conflict raises concerns about disruptions to the Strait of Hormuz, a strategic shipping route. US crude prices surged 6% to above $79 per barrel, with market participants watching for potential moves toward $100. Higher energy costs threaten to reignite inflation pressures just as the Fed was making progress on price stability.

Company Performance:

Broadcom provided a bright spot with projections that AI chip revenue would exceed $100 billion next year. Travel stocks sensitive to energy prices declined, including Delta Air Lines (down 3.3%) and Royal Caribbean (down 0.6%). However, booking platforms rallied sharply—Booking Holdings jumped 11% and Expedia rose 8%—following reports that OpenAI was scaling back ChatGPT shopping features, easing competitive concerns.

Trade Desk surged 22.5% on news of potential advertising partnership talks with OpenAI. Chip stocks showed mixed performance with Nvidia down 0.3% and Marvell Technology up 1.3%.

Federal Reserve Implications:

Investors now anticipate the Fed will delay a 25-basis-point rate cut until September instead of July, according to LSEG data. Policymakers acknowledge needing to assess economic impacts before adjusting monetary policy. Sustained high energy prices could force the Fed to reconsider its plans as inflation risks resurface.