Wall St ends sharply lower as Iran war, soaring crude prompt selloff

STORY: U.S. stocks fell sharply on Thursday, with the Dow and S&P 500 losing more than one-and-a-half percent and the Nasdaq sliding over one-and-three-quarters of a percent.Iranian strikes on two oil tankers sent crude prices above $100 per barrel, further exacerbating inflation fears.The surge in oil prices comes as the U.S. Federal Reserve prepares for its policy meeting next week.While investors just a few weeks ago were betting on a June interest rate cut from the Fed, those odds have shifted significantly, says Kevin Nicholson, global fixed income chief investment officer at RiverFront Investment Group."There's a strong possibility that there might not be any rate cuts this year, especially, a lot of that is going to depend on the length of this war, and how quickly we can turn the pumps back on for the oil market. Because the longer that delay goes, it's going to mean that oil prices will stay elevated for longer. That will create more inflation, that can also hurt the economy and potentially the labor market and slow down growth. And so if you have slower growth with higher inflation, you get stagflation and that's just going to feed on itself."Among Thursday's stock moves, big banks fell on rising credit quality concerns.Morgan Stanley slid 4% after limiting redemptions at one of its private credit funds, while shares of JPMorgan Chase dropped after the bank reduced the value of some loans to private credit funds.Shares of Adobe, which closed lower, slid more than 7% in extended trading after the company's longtime CEO said he will leave his role once a successor is appointed, as the software firm grapples with AI disruption.Shares of Dollar General slid 6% after the discount retailer forecast soft full-year sales, as budget‑conscious shoppers grow more selective with their purchases.And shares of once-popular digital media company BuzzFeed, down 6% at the close, dropped another 16% in extended trading after the company flagged doubts about its future and said it will not provide a forecast for 2026.