Markets under tension: oil prices soar and stocks fall

NEW YORK (AP) — Oil prices soared and stocks fell Friday on the New York Stock Exchange amid concerns that the fallout from Israel's attack on Iranian nuclear and military targets could affect the flow of crude oil around the world, along with the global economy.

The S&P 500 fell 68.29 points, or 1.1%, to close at 5,976.97. The Dow Jones industrial average fell 769.83 points, or 1.8%, to 42,197.79, while the Nasdaq composite sank 255.66 points, or 1.3%, to 19,406.83.

The strongest movements were in the oil market, where the price of a barrel of U.S. benchmark crude oil jumped 7.3% to $72.98. Brent crude , the international standard, rose 7% to $74.23 per barrel.

Iran is one of the world's leading oil producers, although Western sanctions have limited its sales. If a broader war breaks out, it could slow the flow of oil from Iran to its customers and keep the price of crude oil and gasoline higher for everyone around the world.

Beyond the oil coming from Iran, analysts also pointed to the potential for disruptions in the Strait of Hormuz , a relatively narrow shipping lane off Iran's coast. Much of the world's oil extracted from the ground moves through it by ship.

Past attacks involving Iran and Israel have initially sent oil prices soaring, but they have come down “once it became clear that the situation was not escalating and there was no impact on oil supply,” according to Richard Joswick, head of oil at S&P Global Commodity Insights .

That has Wall Street waiting to see what happens next. US stock prices fell to their lowest points of the day after Iran launched ballistic missiles toward Israel.

For now, the price of oil has risen, but it's still lower than it was at the beginning of the year. "This is an economic shock that no one really needs, but it feels more like a shock to sentiment than to the fundamentals of the economy," said Brian Jacobsen, chief economist at Annex Wealth Management.

That, in turn, caused U.S. stocks to suffer a significant loss, though not the largest of the year so far. Companies that use a lot of fuel as part of their business and need their customers to feel confident enough to travel suffered some of the steepest losses.

Cruise operator Carnival fell 4.9%. United Airlines sank 4.4%, and Norwegian Cruise Line Holdings lost 5%.

That overshadowed the profits of U.S. oil producers and other companies that could benefit from the increased fighting between Israel and Iran.

Exxon Mobil rose 2.2%, and ConocoPhillips gained 2.4%, as rising crude oil prices signaled higher profits for them.

Weapons and defense equipment contractors also rallied. Lockheed Martin, Northrop Grumman, and RTX all gained more than 3%.

The price of gold rose as investors sought safer places to store their money. The price of gold rose 1.4%.

Often, U.S. Treasury bond prices will also rise when investors feel nervous. This is because U.S. bonds have historically been viewed as one of the safest options.

But Treasury bond prices fell on Friday, pushing up yields, partly due to concerns that rising oil prices could fuel inflation.