Oil Prices Surge Amid Middle East Tensions, Sinking AI Stocks

Oil prices jumped after Iran launched an attack on U.S. forces using ballistic missiles, leading to a drop in AI stocks on Wall Street despite US stocks drifting. The price jump was a notable 7% for oil.

Crude prices spiked on Wednesday after Iran's Islamic Revolutionary Guard Corps launched ballistic missiles at U.S. forces in the Middle East, an assault U.S. Central Command described as a surprise attack and said its forces intercepted in full . Brent crude futures gained roughly 7% to trade above $90 a barrel, with U.S. West Texas Intermediate advancing to the mid-$80s . President Trump told Fox News that Iran "is going to get a beating," leaving traders pricing a retaliation premium into the front of the curve.

The energy move landed directly on the AI complex. The Dow Jones Industrial Average fell more than 800 points, the S&P 500 slipped roughly 0.7% and the Nasdaq Composite dropped about 1%, with semiconductor and AI-infrastructure names leading the decline. Crude above $90 lifts headline inflation expectations and bond yields, and higher yields compress the long-duration cash flows that underpin AI capex valuations. The rotation was visible in the tape: capital moved toward oil and gas exposure and away from the megacap technology names that have carried the index all year.

Two events sit on top of this. The Federal Reserve delivers its rate decision at 2 p.m. ET the same day, into a market that had already been repricing the odds of a hike, and an oil-driven inflation impulse complicates the disinflation case the market had been leaning on. Separately, MSFT and META report earnings into this backdrop, and both are read as a referendum on AI capital spending. Traders may watch whether the Strait of Hormuz risk premium persists beyond the initial headline, since a sustained move above $90 Brent would keep pressure on the rate-sensitive parts of the market well past this session.