Stocks sank on Wall Street on Thursday after the price of oil spiked to its highest level since the summer of 2024 because of the war with Iran.

The Standard & Poor’s 500 index fell 0.6% and erased what had been a small gain for the year so far. The Dow Jones industrial average briefly dropped more than 1,100 points before finishing with a loss of 784, or 1.6%. The Nasdaq composite slipped 0.3%.

The losses came as financial markets around the world keep following the cue of oil prices. Sharp increases there are raising worries that a long-term surge could grind down the global economy, exhaust households’ ability to spend and push interest rates higher.

The price for a barrel of benchmark U.S. crude shot up 8.5% Thursday to settle…