After a sharp selloff on Thursday morning, stocks recovered most of their losses by midday, although they remained in negative territory after President Trump vowed to continue strikes on Iran and offered no new plan to reopen the Strait of Hormuz.

The S&P 500 sank 15 points, or 0.2%, to 6,560 in early afternoon trading, while the Dow Jones Industrial Average dropped 162 points, or 0.4%, to 46,403. The tech-heavy Nasdaq slid 0.4%.

The volatile trading day comes after the stock market had rallied 3.5% over the previous two trading days on investor hopes that a clear end point to the war would stabilize the global energy markets. Markets will be closed on Friday in observance of the Good Friday holiday.

Oil prices jumped following Mr. Trump's remarks. Brent crude, the international standard, rose 6.53% to $107.77 per barrel by midday Thursday, while benchmark U.S. crude climbed 11.5% to $111.67.

While stocks are sinking, they are not reaching new lows, said Bret Kenwell, a U.S. investment analyst at eToro, a sign markets are taking news about the war in stride. Corporate earnings also appear to be holding up despite the headwinds from higher energy prices, he added.

"Earnings estimates, they continue to inch higher day by day, week by week," Kenwell said. "Earnings are going to be the real story here."

During his address, Mr. Trump repeated his previous assertions that U.S. objectives are nearly met and Iran's offensive capabilities are "essentially decimated" after more than a month of fighting. He offered no new information about those objectives or any plan to reopen the Strait of Hormuz to oil tankers, vowing only to continue U.S. strikes on Iran for two to three more weeks.

"Markets were beginning to price in more certainty, but this speech reintroduces more ambiguity," said Nigel Green of the investment firm deVere Group. "Markets had been pricing a shorter, contained conflict. What they've heard now is far less definitive, and that uncertainty is likely to drive volatility across asset classes."

Oil and gas prices edge higher
The Strait of Hormuz, which normally accommodates roughly 20% of the world's oil and liquified natural gas supply, remains effectively closed and could remain shut to oil tanker traffic through the end of April, Oxford Economics global chief economist Ryan Sweet said in an April 2 research note.

The longer the passageway remains shut, the greater the economic toll, he added.

Gas prices over time
On Apr 02, 2026, the average cost of gas nationwide was $4.08 per gallon. That is $0.02 higher than the day before, $1.08 higher than a month ago and $0.84 higher than a year ago.

While the Trump administration has released oil from the nation's Strategic Petroleum Reserves to offset the reduction in oil supplies, that will become less effective the longer the Strait of Hormuz remains shut, putting upward pressure on oil prices, Sweet said.

"The scary scenarios are, unfortunately, extremely plausible. It's not at all hard to tell a $150 [per barrel] story, and it's not crazy to go to $200," Nobel Prize-winning economist Paul Krugman told CBS News this week.


U.S. gasoline prices, which are tied to the global price of oil, would likely keep climbing above $4 if the strait remains closed, according to Bernard Yaros, lead U.S. economist at Oxford Economics.

The average price of a gallon of gasoline across the U.S. rose to $4.08 on Thursday, up from $4.06 the previous day, according to AAA data. American drivers have spent an additional $8.4 billion in gas costs since the Iran war started on Feb. 28, according to a new calculation from Democrats on the Joint Economic Committee.

Investor FOMO
A baseline estimate from Capital Economics has the war wrapping up by the end of April and energy prices retreating by year-end.

Wall Street also expects the war to end soon, Kenwell said, even though Mr. Trump has already shifted his goals for the length of the conflict several times.

"They know that there's only so much pain that can be tolerated before things start to break, before consumers start to buckle up for gas over $4 a gallon, before businesses start to have a real issue with the input costs," he said.

Investors are worried that the war could drag on longer than initially expected, but they also want to be prepared in the event of a market rally, according to Kenwell.

"I think there's a consensus for investors that the market's going to snap back rather quickly," he said. "And I think there's a fear of sort of missing that trade."

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