A fresh wave of global selling pressure hit Wall Street on Tuesday, as escalating tensions involving Iran deepened fears of prolonged economic disruption. The S&P 500 fell 1.8 per cent in early trade. The Dow Jones Industrial Average was down 907 points, or 1.9 per cent, as of 9:35 am Eastern time, while the Nasdaq Composite dropped 2.1 per cent. The renewed slide came just a day after US equities had erased steep early losses to close marginally higher — a rebound that had hinged on oil prices remaining contained. That relief faded as crude surged closer to levels that investors fear could reignite inflationary pressures. Brent crude, the global benchmark, jumped 8.2 per cent to $84.14 a barrel after trading near $70 less than a week ago. US benchmark crude rose 8 per cent to $76.92. Oil prices spiked after Iran struck the US Embassy in Saudi Arabia, broadening its list of targets to include areas central to global oil and natural gas production. Markets are particularly focused on the Strait of Hormuz, a strategic chokepoint off Iran’s coast through which roughly one-fifth of the world’s oil supply passes. Any disruption there could have outsized consequences for global energy markets. Uncertainty over the duration of the conflict is adding to volatility. US and Israeli strikes have already killed Iranian Supreme Leader Ayatollah Ali Khamenei, yet US President Donald Trump has indicated that hostilities could persist for weeks. In a late-night social media post on Monday, Trump said wars can be fought “forever” with the munitions available to the United States. The sharp rise in crude threatens to compound inflation, which remains elevated, by increasing fuel and transportation costs. According to data from motor club AAA, the average US gasoline price rose 11 cents overnight to about $3.11 per gallon.On Wall Street, airline stocks extended losses amid concerns over higher jet fuel costs and travel disruptions linked to the conflict. United Airlines fell 4.1 per cent, American Airlines declined 4 per cent and Delta Air Lines slipped 3 per cent. Bond markets also reflected rising inflation expectations. The yield on the 10-year US Treasury climbed to 4.10 per cent from 4.05 per cent late Monday and 3.97 per cent on Friday. Higher yields translate into more expensive borrowing costs for households and businesses, affecting everything from mortgages to corporate bond issuances.The impact in equity markets has been most pronounced in sectors and countries heavily reliant on energy imports. In South Korea — a major oil importer — the Kospi index plunged 7.2 per cent in its worst session in nearly two years as markets reopened after a holiday. Japan’s Nikkei 225 fell 3.1 per cent, despite analysts noting that Japan maintains strategic energy reserves estimated to last more than 200 days.