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

The S&P 500 dropped 1% and may be heading for its first back-to-back weekly loss since March. The Dow Jones Industrial Average was down 516 points, or 1%, as of 10 a.m. Eastern time, and the Nasdaq composite was 1.8% lower.

Stocks sank under the pressure of rising oil prices, which raise costs for many businesses and limit their customers’ ability to spend. The price for a barrel of Brent crude oil, the international standard, climbed 6.7% to $100.40.

Earlier in the morning, it touched its highest price in two months following attacks on two Saudi oil tankers in the Red Sea. The attacks threaten another avenue that oil companies can 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 Brent had dropped below $72 per barrel, roughly back to where it was before the United States 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 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 interest rates steady at its meeting Thursday. But traders are banking on a nearly 36% chance the Fed will hike rates at its meeting next week. That's up from less than the 12% probability seen a week ago, according to data from CME Group

That helped push the yield on 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 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 8.6% 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 gave back 4.7%, 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 sank 12.6% 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 6.2% 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% last quarter, but unease nevertheless remains about whether all the billions of dollars Alphabet is pouring into the technology 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 1.5% for one of the larger losses.

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

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed to this report.

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