NEW YORK — Wall Street stocks fell early Monday as a surge in oil prices due to the Middle East war dampened the global economic outlook.

 

All three major US indices dropped more than one per cent, joining a global equity market rout, as oil prices rose in response to output cuts by leading Middle Eastern exporters due to lack of storage space following the effective shutdown of the Strait of Hormuz.

 

"We're being dragged around by events in the Middle East and the price of oil," said Steve Sosnick of Interactive Brokers. "The longer this goes, the bigger the economic impact and the harder it is to recover from."

 

About 25 minutes into trading, the Dow Jones Industrial Average was down 1.6 per cent at 46,729.34.

 

The broad-based S&P 500 fell 1.5 per cent to 6,640.99, while the tech-rich Nasdaq Composite Index shed 1.3 per cent to 22,092.08.

 

President Emmanuel Macron said Monday the G7 will discuss a possible release of strategic oil reserves, as finance ministers of the world's leading industrialised nations prepared to meet for crisis talks on the Middle East war.

 

This week's economic calendar includes key US inflation readings for January and February, a period before the significant jump in oil prices due to the Iran war.