GoldSeek columnist David Haggith said a widening war and attacks tied to the Houthis in the Red Sea helped push oil prices sharply higher and contributed to a steep decline in U.S. equities.

In the article, Haggith wrote that the NASDAQ fell more than 2%, while the Dow dropped 500 points. He said the point decline in the smaller NASDAQ was greater than the Dow’s drop. He attributed the move to a war that had “roared back into life” and expanded after the Houthis opened what he described as a second front by taking control of the Red Sea.

The Red Sea is a closely watched energy and trade corridor because vessels transiting the area connect to the Suez Canal route between Asia, the Middle East and Europe. Attacks on commercial ships can affect oil markets not only through immediate supply concerns, but also through higher shipping, insurance and rerouting costs.

According to Haggith, oil prices surged as Brent Crude moved above $101 per barrel at one point during the day before settling just over $100. He said mainstream financial media had begun to acknowledge that the stock market had been “shortsighted” about the war, citing the headline: “Shortsighted stock market can no longer brush off war: ‘It’s too hard to ignore $100 oil.’”

The article said the U.S. had conducted strikes against Iran for 12 consecutive nights, sending both oil prices and Treasury yields higher. Despite that, Haggith wrote, domestic equities had largely dismissed the risk that the war between the two countries could intensify again, remaining flat while oil climbed.

That changed on Thursday, he wrote, when Brent Crude futures moved above $100 per barrel and the 10-year Treasury yield rose through 4.7%, reaching its highest level since January 2025, after reports of attacks against tankers off the coast of Saudi Arabia.

Higher oil prices are watched by investors because energy costs feed into transportation, manufacturing and consumer inflation measures. Rising Treasury yields can also weigh on equity valuations by increasing discount rates and borrowing costs, particularly for companies whose valuations depend heavily on future growth.

Haggith also cited CNBC’s Jim Cramer, writing that Cramer was finding it difficult to identify reasons to buy stocks while seeing many reasons to sell. The article said short sellers were making money, particularly those shorting stocks that had previously risen the most and that some market participants had said could not fall.

The column then turned to SpaceX, describing it as “the world’s biggest IPO” and saying short sellers had notched $15.5 billion in profit as SpaceX shares slid. Haggith wrote that investors were shorting the artificial intelligence narrative and that Elon Musk had said those betting against SpaceX would eventually regret it.

“There is no sign of short sellers taking profits on SpaceX,” Ortex co-founder Peter Hillerberg said. “If anything they are leaning in harder,” Hillerberg said.

Haggith wrote that one of the largest market names was falling further as short sellers increased their positions. He added that 56% of the stocks purchased from SpaceX during its IPO were bought with loans.

“These problems became too big to ignore,” said Steve Sosnick, chief strategist at Interactive Brokers, about the move in stocks on Thursday. “It’s too hard to ignore $100 oil. It’s too hard to ignore 10-year rates that are above 4.70%. It’s too hard for the stock market to ignore 30-year rates that are solidly above 5%.”

“The survival probability of firms who maintain a significant short position in SpaceX over time is very low,” SpaceX CEO Elon Musk wrote in a post on X on Friday.

Haggith noted the Zero Hedge motto, “On a long enough timeline, the survival rate for everyone drops to zero,” and wrote that while those betting against SpaceX could eventually face losses if they held positions too long, he believed the trade still appeared to have room to continue.

The article said weakness in SpaceX shares partly reflected investor concern about debt-funded AI spending. It also cited Tesla, another Musk company, which reported negative free cash flow in the second quarter for the first time in more than two years as the electric-vehicle maker accelerated spending on AI infrastructure, battery capacity, robotaxis and next-generation manufacturing.

Haggith argued that heavy ongoing spending could not easily be halted because, in his view, such growth narratives depend on continuous financing. He also described the Red Sea as increasingly affected by tanker fires and missile attacks, writing that the region was being illuminated at night by burning oil tankers.

The article cited a JPMorgan note that urged investors to use weakness related to the Iran conflict as a buying opportunity.

“We have consistently argued since 2nd half of March to use the equity weakness brought on by the Iran conflict to buy into, as the off-ramp and the eventual deal were likely, in our view,” JPMorgan equity strategists wrote in a note earlier this month. “The risks of renewed flareups remain, but we believe one should keep using any dips on the back of adverse geopolitical headlines in order to add . ”

Haggith criticized that view and wrote that investors should not assume geopolitical shocks would remain contained. He noted that, back in March, many analysts were surprised that the stock market did not react more strongly to the conflict at first and concluded that the U.S. economy was in better shape than in the past to handle energy shocks. He said Michael Tanney, CEO at investment advisory firm Pereon Wealth, was again taking that view.

Later Thursday, Axios reported that Trump said he was “considering a massive attack” on Iran. He told the news outlet that it would be “bigger than ever before,” before adding, “I am close to making a decision. We are all set for it.” The president did not give a deadline for the decision.

Haggith wrote that he would not rely heavily on Trump’s statements because, in his view, Trump changes positions frequently. He said Trump wants to exit the conflict and hopes threats will pressure Iran into negotiations, but added that Iran has so far maintained its terms and, according to Haggith, has been willing to prolong negotiations that frustrate Trump. With the Houthis now involved in what Haggith described as a second war front, he wrote that Iran understands the pressure on the U.S. is rising.

America pays a heavy price

Haggith wrote that the cost of America’s national debt was also rising sharply, with the Treasury market issuing what he called red alerts on a weekly, if not daily, basis. He said the world’s largest bond market had sent its second red alert of the week and linked that development to questions about whether the U.S. economy was truly in a stronger position to absorb energy shocks.

He asked how long the economy could remain in that supposedly better condition if fuel prices continued to rise, especially before any potential fuel shortages at gas stations that could push prices higher.

The pressure point for markets, as presented in the column, was the combination of geopolitical risk, oil above $100 and long-term Treasury yields above levels cited by traders as difficult for equities to ignore. That mix matters because it can affect household fuel costs, corporate margins, federal borrowing costs and investor appetite for risk at the same time.

The column also referred to a video posted below the original article, which Haggith said showed the Red Sea as a new war front, with oil tankers hit by multiple missile strikes. He wrote that the video explained why a two-front conflict would create difficult tests for the U.S. military.

“Winning one war is difficult enough,” the article said. “Fighting two at the same time could become one of the greatest strategic tests the Pentagon has faced in years.”

Haggith also cited another video that he said described a message Trump sent to Netanyahu to prepare for a major planned expansion of U.S. attacks, as significant evacuation orders were issued to embassies in the Middle East. The article also mentioned a major gold announcement.

David Haggith is the publisher and editor-in-chief of The Daily Doom, which describes itself as a non-partisan daily collection of consequential economic, social and political news from multiple sources around the world, along with daily editorials.