Sharp Jump In Crude Oil Prices Raised Stagflation Fears

Barry Adams
09 Mar, 2026
New York City

Stocks on Wall Street faced additional headwinds amid rising tensions in the Middle East. 

The S&P 500 index dropped 1.2%, and the tech-heavy Nasdaq Composite decreased 1.5% as crude oil prices surged to a four-year high at the onset of Russia's invasion of Ukraine.

The U.S. economy is likely to face a stagflation environment of rising inflation and slowing growth, as the oil prices surpassed the breaking point of $100 a barrel. 

West Texas Intermediate Crude jumped 13% to $112.05 a barrel amid worries of a prolonged supply disruption in the Middle East. 

Brent and Texas crude oil prices jumped nearly 70% since Israel struck Iran on February 28. Over the weekend, Israel struck Iran's oil infrastructure, raising fears of global supply disruptions. 

Moreover, Iraq, Kuwait, the UAE, and Qatar curtailed energy production over the weekend, as the strait remained closed for the fifth day in a row amid rapidly escalating conflict in the region.

At least fifteen nations in the Middle East are involved in the U.S. and Israel's war, which has killed more than 1,200 people in Iran, including at least 165 school children. 

The U.S. president walked back from his earlier assertions that an Iran war will be over in less than a couple of days, and investors are increasingly factoring in a prolonged and wider war in the Middle East.

As the Asian nations brace for a sharp rise in inflation, fueled by a jump in inflation, the European Union member states are worried about another spike in energy prices and a new wave of refugees. 

The yield on the 10-year U.S. Treasury note advanced to 4.2%, reaching a one-month high amid worries of elevated inflation driven by higher crude oil prices.

The yields turned higher despite the U.S. economy in January shedding 92,000 jobs, according to a monthly update released by the U.S. Bureau of Labor Statistics. 

The change in December employment was revised downward by 65,000 from an increase of 48,000 to a decrease of 17,000, and January's change was downwardly revised by 4,000 from 130,000 to 126,000.

The job market appears to be weakening rapidly as employers avoid increasing staff and laying off people as the U.S. economy struggles to adjust to uncertainty injected by higher tariffs imposed by the Trump administration.