U.S. stocks fell sharply on Wednesday as the Dow Jones Industrial Average dropped roughly 500 points, driven by fresh Houthi attacks on Saudi Arabia that pushed oil prices toward $100 a barrel.
Saudi authorities said the Iran-backed Yemeni group struck several cities and energy facilities, injuring 73 people and igniting fires at oil installations. Riyadh vowed to respond, deepening a confrontation that has drawn in Iran and rattled global energy markets.
The market slide worsened from earlier in the week, when the Dow shed about 400 points as investors weighed the risk of a wider Gulf conflict. Crude’s climb toward the $100 threshold reflects growing concern that attacks on Saudi production and export infrastructure could tighten global supply.
Brent and West Texas Intermediate both extended gains as traders priced in the possibility of prolonged disruption. The move built on a rally that had already lifted crude to a six-week high after earlier strikes in the region.
Energy-linked equities diverged from the broad market. Oil producers, oilfield-services firms, and defense contractors drew buyer interest as investors sought exposure to companies expected to benefit from higher prices and heightened military spending.
The attacks represent an escalation from earlier exchanges of fire between the United States and Iran. Saudi Arabia, the world’s largest crude exporter, has repeatedly been targeted by Houthi drones and missiles during periods of regional strain.
Injuries and fires at oil facilities have revived memories of past assaults on Saudi energy sites, which briefly knocked out a portion of the kingdom’s output. Markets remain sensitive to any sign that production capacity or shipping through Gulf waters could be curtailed.
Investors are now watching for Riyadh’s promised response and any statement from Tehran. Further attacks, or retaliation against Iranian or Houthi targets, could push crude past the $100 mark and extend equity losses.
Saudi officials have not detailed the scope or timing of their planned reply. Trading through the rest of the week is expected to track developments across the Gulf.