By Sabrina Escobar
Another Oily Day. Indexes closed in the red for a second straight day, as concerns mount about the war in Iran.
The Dow Jones Industrial Average dropped 204 points, or 0.4%. The S&P 500 and the Nasdaq Composite each shed 0.3%.
All three indexes rebounded from steeper losses earlier in the day, stemming from a surge in oil prices.
Brent crude oil, the international benchmark, briefly edged close to $120 a barrel on Thursday after Israel said it had struck gas processing and petrochemical facilities tied to the South Pars field, the world's largest gas reservoir. In response, Iran struck Qatari liquefied natural gas $(LNG)$ facilities, prompting President Donald Trump to threaten to "blow up the entirety of the South Pars Gas Field." Facilities owned by Shell and partially owned by Exxon Mobil were hit, as well.
"This escalation is unfortunate, so the 'fog of war' persists," wrote Louis Navellier, chief investment officer of Navellier. "Until the fighting stops and the shipping traffic through the Strait of Hormuz resumes, energy inflation is expected to persist."
Brent prices pulled back to under $110 later in the day, helping spark a last-minute rally that pulled stocks up from their lows. Israeli Prime Minister Benjamin Netanyahu said in a press conference that he sees the war with Iran "ending a lot faster than people think."
While oil markets have been the most visible symbol of the war, the damage is spreading across the global economy and snarling supply chains, write my colleagues Avi Salzman and Reshma Kapadia. The Persian Gulf produces several other commodities vital to everything from microchips and fertilizers to cans and cars, including aluminum, ammonia, helium, urea, and sulfur.
The impact on the global economy depends on how long the war lasts, say economists and supply-chain experts. A quicker resolution -- say, anywhere within the next five weeks -- would push global inflation higher but result in a "relatively small" hit to global gross domestic product. If the conflict goes longer, the hit to GDP and inflation would be more acute, and some countries could be forced into recession or hyperinflation.
No wonder investors are feeling jittery.
The Hot Stock: Ciena +7.1% The Biggest Loser: Fair Isaac -7.5%
Best Sector: Energy +1.5% Worst Sector: Materials -1.6%
A Meta Flop
Remember the metaverse? That virtual reality world that was all the rage in the aftermath of the pandemic just before ChatGPT burst onto the scene and redirected investors' attention to artificial intelligence?
Yeah, it has been a while for us, too. It seems as if the key players in the metaverse are also admitting defeat. Earlier this week, Meta Platforms announced it was shutting down a key portion of its metaverse project in June -- Horizon Worlds, the virtual reality app that tied into Meta's Quest VR headset. Reality Labs, the division that hosts the project, has racked up about $75 billion in operating losses since 2020, with another $19 billion to come this year, according to the group's latest forecasts.
In a surprising reversal Thursday, the company said Horizon Worlds would remain available for the "foreseeable future" in response to fans' request. But the die is cast here.
Reality Labs' losses should serve as a reminder for Wall Street to "think twice" about its current AI forecasts, writes my colleague Martin Baccardax. Meta wasn't the only one to get swept up in the metaverse hype, he notes. In 2022, McKinsey predicted it would generate up to $5 trillion in impact by 2030, and other analysts pegged the metaverses' "total addressable market" to a value of $8 trillion.
"The fact that none of these predictions was even remotely accurate should be top of mind as we're being told about the future of artificial intelligence," Martin notes.
Companies are investing billions of dollars in carving out AI infrastructure, betting on projections that AI will contribute even more trillions of dollars to the global economy. And while it's unlikely AI will flop like the metaverse did -- Accenture stock rose following its earnings report Thursday on management commentary that the company was seeing AI-driven growth -- investors should be cautious buying into far-flung predictions.
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March 19, 2026 19:55 ET (23:55 GMT)
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