US stocks tumbled to a six-month low as oil prices jumped by the most in a fortnight.
The S&P 500 closed 1.7 per cent lower on Thursday, its worst daily decline since January 20, with nine of the benchmark index’s 11 sectors in negative territory.
The Nasdaq Composite dropped 2.4 per cent. That left it down more than 10 per cent from its October peak, passing the threshold for a “technical correction”.
Stocks and oil prices have been negatively correlated since the war in Iran began.
Brent crude settled 5.7 per cent higher at $108.01 a barrel on Thursday. It was the biggest one-day jump for the international benchmark since March 11. West Texas Intermediate, the US marker, climbed 4.6 per cent to $94.48.
Yields on US Treasuries, which rise as the bond prices fall, jumped to multi-month highs on traders’ concerns that an oil price-induced inflation shock could prompt the Federal Reserve to raise, rather than cut, interest rates this year.