Oil prices jump above $90 a barrel as Trump promises retaliation for Iranian missile attack

Global crude prices climbed almost 8% on Wednesday, pushing the benchmark above $90 a barrel, after President Donald Trump said the United States would retaliate against an overnight Iranian missile attack. The escalation sent U.S. equity markets lower, with the Dow Jones Industrial Average closing down 2.1%, the S&P 500 slipping 1.5% and the Nasdaq falling 1.7%.

The Federal Reserve announced it would keep interest rates unchanged while emphasizing its commitment to curb elevated inflation, adding to the market sell-off. Gasoline prices have risen sharply, with the average U.S. pump price at $4.09 per gallon, a 37% increase since the conflict began in late February.

"We'll be hitting them [Iran] hard," Trump told Fox News.

U.S. Central Command reported that an attempted surprise attack involving multiple ballistic missiles targeted U.S. forces in the Middle East on Tuesday, prompting the promised response.

The surge follows weeks of volatility in oil markets tied to the on-and-off fighting. Earlier, a tentative peace agreement had briefly lowered prices, but renewed hostilities revived concerns about supply disruptions, especially through the Strait of Hormuz, which carries about one-fifth of global oil shipments.

Fed Chair Kevin Warsh reiterated the central bank’s goal of bringing inflation down to 2%, noting that “persistently high prices are a burden for the American people.” The Fed’s policy statement described inflation as “elevated” and linked it in part to supply shocks in energy and other sectors.