Wall Street Braces for Sharp Drop as Middle East Tensions Spike Oil Prices

Futures linked to the S&P 500 and the Dow Jones Industrial Average were down nearly 2 per cent in pre-market trade, while futures of the Nasdaq Composite fell around 2.5 per cent -- indicating a weak start for Wall Street.

The decline comes as tensions between the United States, Israel and Iran intensify.

Concerns over possible disruption to global oil supplies have kept crude prices elevated, raising fears of higher consumer inflation.

Technology stocks were under pressure after recent gains. Nvidia fell 3.1 per cent, while Microsoft declined 1.8 per cent in pre-market trading.

Memory chip makers also saw sharp losses, with SanDisk dropping 8.4 per cent and Western Digital losing 5.6 per cent after a strong rally in February.

However, energy and defence stocks were among the few gainers. Occidental Petroleum rose 3.7 per cent and Cheniere Energy climbed 9.8 per cent.

Defence majors such as Lockheed Martin and AeroVironment also traded higher.

The market volatility follows reports that Iran has intensified attacks in the region, targeting energy infrastructure in Gulf countries and oil tankers.

Tehran reportedly launched drone strikes near the US embassy in Riyadh and threatened to close the Strait of Hormuz.

The strategic waterway off Iran's coast handles nearly 20 per cent of the world's oil supply and a significant portion of liquefied natural gas shipments.

Crude prices have risen for the fourth straight day amid these developments. Global benchmark Brent crude moved above $80 per barrel, touching an intraday high of $82.24 after surging about 7 per cent on Monday. West Texas Intermediate hovered near $75.5.

Saudi energy giant Saudi Aramco halted operations at its Ras Tanura refinery following a drone strike in the area.

Qatar also suspended liquefied natural gas production at its largest export facility after it was targeted in an attack.

- IANS