September rate hike odds jumped to 82%. Brent hit $100. The Dow lost 458 points

U.S. stocks declined Thursday as a sharp spike in crude prices, triggered by Houthi attacks on Saudi tankers in the Red Sea, compounded selling pressure that was already building from disappointing results at two of the world's largest companies.

The Dow Jones Industrial Average shed 458 points, or 0.9%, while the S&P 500 slid 1.2% and the Nasdaq $NDAQ Composite retreated 2.

2%. Brent crude futures gained more than 7% to trade above $100 per barrel, while U.S.

West Texas Intermediate crude futures advanced roughly 6.5% to above $92 per barrel. Both contracts were trading at prices not seen since before Washington and Tehran struck a deal to halt their fighting last month.

The Yemen-based, Iranian-backed Houthi movement said it carried out strikes on two Saudi oil tankers in the Red Sea, stoking alarm that hostilities in the region could be widening. President Donald Trump separately threatened on Truth Social to bomb Iranian bridges and power plants if Iran attacks ships in the Strait of Hormuz. Later Thursday, according to Axios, Trump said he is considering "a massive attack" on Iran, telling the outlet it would be "bigger than ever before."

Rising oil prices pushed Treasury yields higher. The 10-year yield topped 4.7%, its highest level since January 2025, while the 2-year yield climbed above 4.

35%. According to the CME $CME FedWatch tool, markets are now pricing in an 82% chance of a Federal Reserve rate increase at the September meeting, nearly double the 52% odds recorded a week earlier. Ross Mayfield, investment strategist at Baird, told CNBC that for the next two to three months the market will be focused on Iran.

"It's pretty hard to ignore [the conflict], not just because of the oil prices but also because of the pressure across the yield curve," he said. Alphabet $GOOGL shares dropped 6% after the Google parent bumped its 2026 capital spending outlook up to $205 billion, attributing the increase to AI infrastructure needs — a disclosure that amplified already-mounting unease on Wall Street about how much the biggest tech platforms are pouring into artificial intelligence. Tesla $TSLA shares plunged roughly 13% to 14% after the automaker came in well below Wall Street's second-quarter expectations, with costs outpacing sales growth and free cash flow swinging into negative territory, according to The Wall Street Journal.

The Cboe Volatility Index, Wall Street's closely watched fear gauge, jumped more than 14% by the close of trading.