U.S. stocks extended their recent decline as the war in the Middle East continued to escalate, driving up oil prices. The Dow Jones Industrial Average fell 1.2%, the S&P 500 dropped 1.5%, and the Nasdaq Composite slid 1.8%. Energy stocks rose as crude oil surged past $90 a barrel, while tech and consumer discretionary sectors led the losses.

Investors sought safety in bonds and gold, pushing yields lower and bullion higher. The escalation has raised concerns about supply disruptions and global economic growth, with analysts warning of further volatility ahead. Federal Reserve officials signaled a cautious approach, noting that higher energy costs could complicate inflation management.

Market participants are closely watching diplomatic efforts and any potential supply responses from major producers.