US equity markets fell on Thursday as a sharp spike in crude oil prices followed intensifying military friction between Washington and Tehran. Compounding the market downturn, the Federal Reserve's preferred inflation metric climbed to a three-year peak in April.
At 10:01 a.m. ET, the Dow Jones Industrial Average fell 110.97 points, or 0.22%, to 50,533.31, the S&P 500 gained 1.71 points, or 0.02%, to 7,521.68 and the Nasdaq Composite lost 6.80 points, or 0.02%, to 26,667.93.
In early trading, the S&P 500 slipped 0.1%, the Dow Jones Industrial Average fell 328 points, and the Nasdaq Composite was 0.2% lower.
In a retaliatory move on Thursday, Tehran launched strikes against an American airbase. This escalation occurred just hours after Washington launched a wave of fresh military operations, and shortly after President Donald Trump dismissed claims that his administration was close to finalizing a compromise agreement with Iran.
On the macroeconomic front, the Commerce Department reported that the Personal Consumption Expenditures (PCE) price index accelerated by 3.8% in April year-over-year, climbing from the 3.5% rate recorded in March.
The latest inflationary data highlights the widening economic disruptions hitting American households amid Trump's ongoing conflict with Iran.
"You can see how Americans are getting squeezed financially right now," said Heather Long, chief economist at Navy Federal Credit Union.
Driven by soaring fuel costs, American consumer spending on gasoline and associated petroleum products surged by $28.8 billion this April compared to the same period last year, according to official government figures.
In the bond market, the yield on the 10-year Treasury fell to 4.46% from 4.48% late on Wednesday.
Key Stock Movers
Airlines stocks declined as oil prices rose. American Airlines, Jetblue and Southwest Airlines falling between 1.5% and 2.2%.
Snowflake shares rallied 34% after the data analytics company announced a five-year AI infrastructure deal worth $6 billion with Amazon Web Services.
Shares of Datadog and MongoDB rose 1.1% and 9.8%, respectively.
Caterpillar stock fell 3%.
Dollar Tree equity surged 16.8% after the retailer raised its full year profit forecast.
Best Buy shares gained 13.5% after the electronics retailer forecast second quarter sales above analysts estimates.
Kohl's stock advanced 18.5% after the department store chain posted quarterly sales in line with estimates.
Bullion
Gold pared some of its losses on Thursday after the latest US inflation data for April was released.
As of 9:16 a.m. EDT (1316 GMT), spot gold was down 0.6% at $4,428.69 per ounce. US gold futures fell 0.5% to $4,426.20.
Among other metals, spot silver fell 1.2% to $73.69 per ounce and platinum lost 1.6% to $1,887.75. Palladium slipped 3.1% to $1,347.31.
"The problem for gold is that geopolitical instability is no longer operating in isolation. Higher energy prices are once again feeding into inflation concerns, pushing Treasury yields modestly higher and strengthening the dollar at the same time," said Fawad Razaqzada, market analyst at City Index.