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Wall Street opened in the red this Thursday after President Donald Trump promised to continue his tough stance against Iran, undermining investors' hopes for a swift resolution to the conflict in the Persian Gulf.
The Dow Jones Industrial Average fell by 596 points, or 1.28%, to 45,969 points at the opening of the New York Stock Exchange, reported the news agency EFE.
The selective S&P 500 fell by 1.32%, down to 6,488 points, while the tech Nasdaq dipped by 1.86%, down to 21,435 units.
The declines came after the televised speech that Trump gave on Wednesday night, in which he stated that the war against Iran could extend for two or three more weeks to achieve his administration's military objectives.
"I can say tonight that we are on track to complete all of the United States' military objectives shortly. Very soon, we will strike them with great force," the leader stated.
In one of the most powerful moments of the speech, Trump warned: "In the next two or three weeks, we are going to push them back to the Stone Age, where they belong."
The president's belligerent tone reversed the optimism that had driven the markets on Tuesday, when the S&P 500 rose more than 1.5% and the Nasdaq nearly 2% on signs of a possible de-escalation.
International markets also felt the impact: the Kospi of Seoul plummeted by 4.5%, with Samsung Electronics and SK Hynix losing between 6% and 7%, while the Australian S&P/ASX 200 closed down by 1.1%.
The price of oil escalated tensions in the markets: the WTI crude oil barrel rose by up to 7.1%, trading between 103 and 107 dollars, while the Brent reached 105 to 108 dollars.
Those levels are almost double the prices recorded at the end of February, when WTI was around 65 to 68 dollars, before the conflict escalated from March 8.
The closure of the Strait of Hormuz by Iran —a route through which between 20% and 25% of the world's oil is transported— is the main factor putting pressure on global energy prices.
Analysts from MTrader attributed the stock market drop directly to the new escalation announced by Trump and the impact on oil prices following a decrease in optimism regarding a quick resolution in the Middle East.
Despite the aggressive tone, Trump insisted that diplomatic talks with Tehran are ongoing and denied that Washington is seeking a regime change, although he acknowledged that the Iranian leadership has shifted following the deaths of its key leaders. "Regime change was not our objective... but it has occurred," he stated.
Larry Fink, CEO of BlackRock, warned that oil could reach 150 dollars per barrel if Iran threatens the Strait of Hormuz after the war, which could trigger a global recession.
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