Global oil prices surged sharply on Wednesday, July 29th, 2026, climbing nearly 8% to cross above $90 a barrel after an Iranian missile attack targeted U.S. forces in the Middle East. The attack ended a brief period of calm that had raised hopes among investors for a negotiated resolution.

President Donald Trump announced that the U.S. will respond to the overnight missile attack launched by Iran. According to U.S. officials, the missile assault was an "attempted surprise attack" involving multiple ballistic missiles, which were intercepted.

The spike in oil prices contributed to a steep selloff in U.S. stock markets. The Dow Jones Industrial Average fell 1,153 points (2.1%), marking its worst day since April 2025. The S&P 500 dropped 1.5%, and the Nasdaq declined 1.7%. The selloff deepened following a Federal Reserve decision to hold interest rates steady while reaffirming its commitment to tackling elevated inflation.

Oil prices heavily influence gasoline costs, with the average price per gallon currently at $4.09, according to AAA. This represents a 37% increase since the war began in late February. Persistently high prices remain a burden for the American people, driven in part by supply shocks in sectors including energy.

Investor sentiment, as measured by the CME Group's FedWatch Tool, indicates odds favoring a quarter-point interest rate hike at the Federal Reserve's September meeting.

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