Oil prices are jumping again Thursday as increased fighting in the Middle East threatens to slow the global flow of crude, and Wall Street is sinking with sharp drops for two of its most influential stocks, Alphabet and Tesla.

The S&P 500 dropped 0.8 per cent and may be heading for its first back-to-back weekly loss since March. The Dow Jones Industrial Average was down 0.7 per cent as of 9:35 a.m. ET, and the Nasdaq composite was 1.6 per cent lower.

Stocks sank under the pressure of rising oil prices, which raise costs for many businesses and divert their customers’ dollars away to pay higher prices for fuel. The price for a barrel of Brent crude oil, the international standard, climbed more than six per cent to $100.26 US.

That’s the highest price for oil in about two months, and comes after attacks on two Saudi oil tankers in the Red Sea. The attacks threaten another avenue that oil companies use to transport their crude from the Middle East to customers worldwide, along with the Strait of Hormuz.

Underscoring the importance of the sea route for the economy, U.S. President Donald Trump threatened “major military punishment” against the Houthi rebels in Yemen, who are backed by Iran, if they keep attacking ships.

It was just a few weeks ago that the price for a barrel of Brent had dropped below $72, roughly back to where it was before the U.S. and Iran attacked Iran to begin their war, on hopes that the Strait of Hormuz would fully reopen to oil tankers.

The jumps in oil prices are threatening to reaccelerate inflation. That in turn could push central banks to raise interest rates, which would slow economies and undercut prices for stocks and other investments.

The yield on the 10-year Treasury rose to 4.7 per cent from 4.67 per cent late Wednesday and from just 3.97 per cent before the war with Iran began.

That’s a significant increase, and it’s already helped bring long-term U.S. mortgage rates to their highest levels in nearly a year.

Stocks of companies with big fuel bills fell to sharp losses on worries about higher expenses.

American Airlines lost 9.1 per cent even though it reported a much bigger profit for the spring than analysts expected, something that usually sends a stock’s price higher. It raised airfares, which helped it offset its higher fuel prices.

WATCH | Houthis strike 2 Saudi tankers:

Global shipping fears widen as Iran-backed Houthis claim strikes on 2 Saudi oil tankers

Yemen’s Iran-backed Houthis have claimed strikes on two Saudi-flagged oil tankers in the Red Sea, threatening another vital waterway and potentially leading to broader economic disruption.

Southwest Airlines gave back 4.2 per cent, even though it also reported better profit and revenue for the latest quarter than analysts expected. It wrung more profit out of each $1 of its revenue during the spring, even with higher fuel prices.

One of the heaviest weights on the U.S. stock market was Tesla, which sank 9.8 per cent after Elon Musk’s electric-vehicle company reported a weaker profit for the latest quarter than analysts expected. Because it’s one of the largest stocks in the S&P 500 by market value, its stock has more influence on the index than nearly every other.

Alphabet’s stock fell 5.7 per cent even though the parent company of Google delivered stronger profit and revenue than analysts expected.

Investors seemed to be focusing instead on how much more Alphabet said it’s set to spend on artificial-intelligence investments. CEO Sundar Pichai said AI demand helped its cloud revenue growth accelerate to 82 per cent last quarter, but investors are still uneasy about whether all the billions of dollars Alphabet is pouring into the technology will pay off in terms of productivity and profits.

In stock markets abroad, indexes fell sharply in Europe as oil prices jumped. France’s CAC 40 fell 1.7 per cent for one of the larger losses.

Indexes earlier in the day were stronger in Asia, where South Korea’s Kospi jumped 4.4 per cent.