US stocks plummeted Thursday as Operation Epic Fury in Iran showed no signs of slowing – sending oil prices above $80 a barrel and reigniting inflation fears.

The Dow Jones Industrial Average pared losses to close down 784 points, or 1.6%, while the S&P 500 and Nasdaq fell 0.6% and 0.3% as the Middle East conflict entered its sixth day.

National average gasoline prices shot to $3.25 a gallon, according to AAA, while Brent crude oil rose 4.3% to $81.38 a barrel. West Texas Intermediate crude oil jumped 9.3% to more than $81 a barrel – its highest level since January 2025.

Wall Street’s volatility index – also known as the fear gauge – again jumped higher, while gold futures fell 1.2% to $5,073.60.

Iran’s reported closure of the Strait of Hormuz – a vital maritime route for 20% of the world’s oil supply – has left investors panicked over whether oil could potentially top $100 a barrel, a figure that would almost certainly shake markets.

A potential spike in gasoline prices could potentially reheat inflation and further delay interest rate cuts, as tariffs have already complicated the Fed’s path toward further easing. 

Energy shocks typically ripple through consumer prices, though the impact is often muted unless the supply disruption is prolonged.

“The key issue is how long will this be a problem. If security and safe passage of oil cargos and LNG infrastructure and transit can be quickly reestablished, this will be a minor disruption,” energy industry veteran Derek Reisfield told The Post. “If the problem isn’t quickly fixed, this has the potential to cause all sorts of economic problems.

“The uncertainty is raising risk levels and thus triggering a sell off as investors prefer to wait it out until the smoke clears.” 

Broadcom emerged as a notable outlier in the stock market Thursday, after the company forecast AI chip revenue above $100 billion next year. Shares in the chipmaker jumped nearly 5%.

Airline stocks took another beating, as shares in Delta, American Airlines and Southwest fell 4%, 5.4% and 6.9%, respectively.

Expedia and Booking, meanwhile, jumped 14% and 8.5%, respectively.

A prolonged trade route bottleneck could also disrupt supplies of key semiconductor manufacturing materials.

Declines in financials such as JPMorgan Chase and Goldman Sachs also weighed on the blue-chip Dow.

Policymakers have broadly acknowledged the need to wait and gauge the impact on the economy, although investors are anticipating price pressures to delay a quarter-point interest rate cut to September from July, according to LSEG-compiled data.

With Post wires