NEW YORK (AP) — Brent oil shot to its highest price since May on Thursday as increased fighting in the Middle East threatens to slow the global flow of crude. At the same time, sharp drops for two of Wall Street’s most influential companies, Alphabet and Tesla, yanked the U.S. stock market lower.

The S&P 500 sank 1.4% and is heading toward its first back-to-back weekly loss since March. The Dow Jones Industrial Average was down 546 points, or 1%, as of 11:45 a.m. Eastern time, and the Nasdaq composite was 2.6% lower.

Stocks fell under the pressure of rising oil prices, which raise costs for businesses and erode their customers’ ability to spend. The price for a barrel of Brent crude oil, the international standard, jumped 7.2% to $100.87.

It earlier touched the highest price since May for the most actively traded Brent contract in the market. The cause: attacks on two Saudi oil tankers in the Red Sea. That threatens another avenue that oil companies use to move 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, 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 Brent had dropped below $72 per barrel, roughly back to where it was before the United States and Israel 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 worsen inflation, just when it had begun to decelerate by more than economists expected. That in turn could push the Federal Reserve and other central banks to raise interest rates, which would slow economies and undercut prices for stocks and other investments.

The European Central Bank held its main interest rates steady at its meeting Thursday. But traders are banking on a nearly 36% chance the Fed will hike the federal funds rate at its meeting next week. That’s up from the nearly 12% probability seen a week ago, according to data from CME Group.

An increase by the Fed would be the first since 2023.

Higher oil prices pushed the yield of the 10-year Treasury up to 4.70% from 4.67% late Wednesday and from just 3.97% before the war with Iran began. That’s a significant increase, and it’s already brought long-term U.S. mortgage rates to their highest levels in nearly a year.

Gasoline prices tend to rise with oil prices, and a gallon of regular costs an average of $4.09 across the United States, according to AAA. That’s still below highs of roughly $4.56 in May, but it was at just $3.93 a month ago.

On Wall Street, stocks of companies with big fuel bills fell to sharp losses on worries about higher expenses.

American Airlines fell 7.8% 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, during the latest quarter.

Southwest Airlines lost 4%, even though it also reported better profit and revenue 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 tumbled 13.7% 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.

One of the few that’s larger is Alphabet, and its stock fell 7% even though the parent company of Google delivered stronger profit and revenue than analysts expected.

Investors seemed to focus instead on how much Alphabet said it’s set to spend on artificial-intelligence investments. Alphabet raised its forecast for capital spending over the full year after its investments last quarter doubled to nearly $45 billion from a year earlier.

CEO Sundar Pichai said AI helped its cloud revenue growth accelerate to 82% last quarter, but unease nevertheless remains about whether all the money going into AI will pay off in terms of productivity and profits.

Such worries have been shaking the AI industry broadly in recent weeks, leading to big swings for the overall stock market.

In stock markets abroad, indexes fell sharply in Europe as oil prices jumped. France’s CAC 40 dropped 1.8% for one of the larger losses.

Indexes in Asia were stronger earlier in the day, and South Korea’s Kospi jumped 4.4%.