US STOCKS-Wall Street extend losses as investors weigh Middle East war risks

S. stocks extended losses on Thursday afternoon as the Middle East conflict entered its sixth day, pushing oil prices higher and spurring worries about inflation and whether the Federal Reserve will cut interest rates.

Expansion ‌of the conflict to more countries fed fears of disruption in the Strait of Hormuz, a critical energy choke point, where missile and drone threats have drastically reduced tanker traffic. This lifted U.S. crude prices about 8% to roughly $80 per barrel. Global benchmark Brent crude rose about 4% to $85. Traders worry a prolonged interruption could feed inflation ‌and slow economic growth. "Look at oil today, it tells you everything you need to know about why the stock market's down," said Michael Antonelli, market ‌strategist at Baird Private Wealth Management.

At 2:15 p.m. the Dow Jones Industrial Average fell 1,045.27 points, or 2.14%, to 47,694.16, the S&P 500 lost 83.30 points, or 1.21%, to 6,786.42 and the Nasdaq Composite lost 243.81 points, or 1.06%, to 22,566.06. Limiting index losses were energy stocks, up 0.6%. A strong forecast from chip designer Broadcom that projected its artificial intelligence chip revenue would exceed $100 ⁠billion next ​year sent its shares up 3.2%.

With ⁠the U.S.-Israeli air war against Iran raging, Wall Street's main indexes have fared better than their European and Asian counterparts this week, aided primarily by a rebound in technology stocks that bore ⁠the brunt of February's selloff. "The base case for the U.S. itself is that this war should be relatively short-lived which explains why, in absolute terms, equities have not fallen ​by very much, despite the quite sharp increases we've seen in spot commodity prices," said Kiran Ganesh, multi-asset strategist at UBS Global Wealth Management.

Any ⁠signs that crude prices could hit $100 a barrel would be worrisome for markets and investors were on the lookout for reports that the conflict could be nearing its end. The passenger airlines sub-sector tumbled ⁠6%. ​Royal Caribbean Cruises fell 1.8% and Viking Holdings lost 4.2%. Investors expect price pressures to delay a 25-basis-point interest rate cut by the Federal Reserve to October from July, according to LSEG-compiled data. Losses were broad, with healthcare, materials , consumer staples and industrials falling over 2.5% each. The CBOE volatility index was up 3.7 points ⁠at 24.91, reflecting broader investor caution, while the rate-sensitive Russell 2000 index was down 2.52%.

Declines in financials such as JPMorgan Chase and Goldman Sachs also weighed ⁠on the blue-chip Dow. Meanwhile, data showed the ⁠number of Americans filing new applications for unemployment benefits was unchanged last week. The S&P 500 posted five new 52-week highs and two new lows, while the Nasdaq Composite recorded 27 new highs and 57 new lows.