Dow sinks 100 points, oil nears $100 as Strait of Hormuz traffic remains limited

US stocks sank Thursday morning as oil jumped back near $100 after Iran accused the US of violating its ceasefire agreement and traffic through the Strait of Hormuz remained limited.

The Dow Jones Industrial Average slumped 128 points, or 0.3%, by approximately 9:35 a.m. ET, while the S&P 500 and Nasdaq each fell 0.1%.

Brent crude oil prices jumped 3.9% to $98.42, while West Texas Intermediate crude rose 4.6% to $91.74.

US stock futures sank Thursday morning as oil jumped back near $100 a barrel. REUTERS

National average gasoline prices, which typically lag movement in oil benchmarks by a few weeks, continued to climb above $4 a gallon – hitting $4.17 on Thursday, according to AAA.

It was a sharp turnaround from the previous day, which saw the Dow clinch its biggest gain since April 2025 while oil prices eased down near $95 a barrel after President Trump announced a two-week ceasefire with Iran.

Trump emphasized that the ceasefire was contingent on the reopening of the Strait of Hormuz, a vital maritime route for 20% of the world’s oil supply – but Iran is still reportedly blocking ships from passing through the waterway, blaming it on a broken agreement.

Late Wednesday, Iran accused the US of breaking a joint ceasefire agreement as Israel launched a massive blitz on Tehran-backed Hezbollah in Lebanon.

“Now the very ‘workable basis on which to negotiate’ has been openly and clearly violated, even before the negotiations begin,” Iran’s parliamentary speaker, Mohammad Bagher Ghalibaf, wrote in a statement on X. “In such [a] situation, a bilateral ceasefire or negotiations is unreasonable.” 

Iran has also reportedly been seeking tolls as high as $2 million per ship for safe passage through the strait, which could further complicate the free flow of crude through the Persian Gulf.

When asked about the idea on Wednesday, Trump told ABC News that he’s open to the concept as long as the US gets a cut of the action, calling it “a beautiful thing.”

Traders are hedging their enthusiasm as energy experts warn that even if the strait remains fully reopened, it could still take months for global supplies to normalize – and US gasoline prices will likely stay high through the summer.

Despite the temporary peace agreement, tensions remained high as Trump threatened to unleash a “bigger, and better, and stronger” military assault on Tehran if it violates the deal.

In a Truth Social post late Wednesday, Trump confirmed that US military forces will remain in the Middle East until Iran fully complies with a deal. 

Vice President JD Vance is scheduled to lead the US delegation in talks with Iran on Saturday in Islamabad, alongside Pakistani mediators.