Oil prices surge, stocks tumble in the wake of Israel’s strikes on Iran

Oil prices surged and stocks tumbled Friday in the wake of Israel’s strikes on Iran’s top military officials and nuclear sites.

U.S. oil benchmark prices climbed approximately 8% to about $74 a barrel, the highest level since early April. Major stock indexes fell more than 1% in premarket trading, though they pared heavier losses as investors assessed that wider fallout from the conflict was initially limited. Tech stocks like Nvidia and Tesla moved lower, while shares in oil and defense-industry firms like Chevron and Lockheed Martin traded up.

Gold prices also reached a new monthly high, rising more than 1% to as much as $3,440 an ounce. The price of bitcoin fell almost 1% to less than $105,000. U.S. bond prices were little changed.

Israel launched strikes on Iran early Friday local time, a dramatic escalation of long-running tensions between the two countries. Israel officials have warned of a “lengthy operation,” while President Donald Trump said there was “much more to come” from Israel and that Iran should make a deal. Iran has so far retaliated by launching drones toward Israel while also threatening U.S. assets in the region.

While spiking oil prices usually signal higher gasoline prices for consumers in the coming days and weeks, experts said there was no need to rush out to the pump.

“Higher gas prices are coming. But it will not be insane, and ultimately gas prices remain affordable vs income,” Patrick De Haan, head of petroleum analysis at price tracker GasBuddy, said in a post on X.

Higher oil prices could stoke inflation, complicating the Federal Reserve’s calculations as it continues to weigh a weakening job market against fears of the price impact from Trump’s tariffs.

Before the strikes, stocks appeared heading for a wining week after the Trump administration signaled renewed interest in a rapprochement with China over trade concerns. The president said he planned on stabilizing import duties on Chinese goods at 55%, while those on U.S. goods into China would be set at 10%.