04:58 PM EST, 03/05/2026 (MT Newswires) -- US equity indexes fell while government bond yields jumped on Thursday as the Middle East war escalated, sending crude oil to its highest since mid-2024.

The Dow Jones Industrial Average slumped 1.6% to 47,954.74, the Nasdaq Composite slid 0.3% to 22,748.99, and the S&P 500 declined 0.6% to 6,830.71 at the close.

West Texas Intermediate crude oil futures soared 6.4% to $79.33 a barrel following a small reprieve on Wednesday.

Stocks came under fresh pressure early thanks to a rebound in crude oil, according to a note from Charles Schwab. Hundreds of ships remain stuck in the Persian Gulf despite U.S. promises to escort oil tankers through the Strait of Hormuz, the note cited Reuters and added that "Iran has enough drones to create havoc in the Gulf for months."

Iran's "initial response to the US-Israeli attack, with missiles raining cats and dogs, is what is pushing oil and gas prices, freight rates, and shipping insurance premiums higher," PVM Oil Associates said in a note.

A crude oil supply disruption has prompted China to halt exports of refined products, while Japan's refiners have asked their government to tap strategic oil reserves, Bloomberg reported. An Indian refinery has also shut its crude unit due to a lack of supply. Qatar, the biggest liquefied natural gas producer in the Gulf, declared force majeure on gas exports on Wednesday.

There remains a high level of uncertainty over the potential length of the conflict and scale of disruption to global energy supplies, CNN cited an MUFG research note.

The CBOE Volatility Index, also known as the fear gauge, surged 12% to 23.75.

US Treasury yields rose, with the two-year up 3.5 basis points to 3.58%. The 10-year yield jumped 5.4 basis points to 4.14%.

In economic news, US job cuts fell in February following a surge at the start of the year, but downsizing plans could pick back up due to the US-Iran war, Challenger Gray & Christmas said Thursday. Employers announced 48,307 layoffs last month, down 72% year-over-year and 55% from January, according to the outplacement and executive coaching firm.

US initial jobless claims remained at 213,000 in the week ended Feb. 28 after a small upward revision in the previous week, compared with expectations for 215,000 in a survey of analysts compiled by Bloomberg. The four-week moving average fell by 4,750 to 215,750.

In company news, Trade Desk ( TTD ) and Microsoft ( MSFT )-backed (MSFT) OpenAI had early discussions to form a collaboration to support ad sales, The Information reported Wednesday, citing three unnamed sources familiar with the talks. Shares of Trade Desk ( TTD ) surged 18%, the top gainer on the S&P 500.

In precious metals, gold futures fell 0.9% to $5,088.4 per troy ounce, while silver futures slumped 1% to $82.32 per troy ounce.