U.S. stocks extended their recent decline as the war in the Middle East continued to escalate and drive up oil prices

The Dow Jones Industrial Average fell 405.41 points, or 0.77%, to 52380.66. The S&P 500 lost 37.16 points, or 0.48%, to 7636.36 and the tech-heavy Nasdaq Composite dropped 168.07 points, or 0.64%, to 26253.34. It was the third straight loss for the U.S. indexes.

Oil futures rose $3.02 per barrel, or 3.25%, to $96.05 a barrel in New York, the seventh consecutive gain, marking the longest rising streak since the beginning of the war in March. Oil rallied after the U.S. launched another round of attacks on Iranian tankers near the Strait of Hormuz in reprisal for Iranian strikes at warships. The U.S., Iran and Houthi rebels have all targeted oil infrastructure in recent days.

In the "air pocket" after earnings season, there's "more appreciation of the conflict, how long it's been going on and what it means if it continues to go on further," said Timothy Chubb, chief investment officer at Girard, a wealth-management firm owned by Univest. Investors are particularly concerned about the implications of oil moves for long-term Treasury yields, he said.

The yield on the policy-sensitive two-year Treasury rose 0.030 percentage point to 4.425%, closing at a more than two-year high. The yield on the 10-year Treasury rose 0.030 percentage point to 4.836%, another 23-month high. The yield on the 10-year note has now risen in eight of the last 10 trading sessions. The yield on the 30-year bond rose 0.021 percentage point to 5.285%, closing within three basis points of a 19-year high.

On Wednesday, the U.S. Treasury Department unveiled plans to buy back $6 billion in bonds maturing in 10-20 years. That was more than Treasury Secretary Scott Bessent's initial estimate of roughly $4 billion in purchases intended to tame the "fever" in bond markets.

The U.S. dollar was more or less flat against rivals as traders awaited inflation data later in the week.

Gold futures rose $22.10, or 0.5%, to $4416.00 a troy ounce. Copper futures rose 6.45 cents, or 0.96% to $6.8035 a pound, another record high.

There were more developments in the artificial-intelligence boom.

Shares of Meta Platforms rose 6.6% to $653.69 after it launched Muse, a personal AI agent designed to automate routine tasks such as booking appointments, filling out forms and monitoring home-security camera feeds.

Chubb, of Girard, said Muse's revenue potential would set some investors' minds at ease following concerns about potential overspending on AI infrastructure. "It's answering the bear case -- that capex is finally delivering return on investment capital," Chubb said.

Alphabet's Google said it would spend more than $15 billion to develop AI infrastructure in Finland.

The AI bears did have something to consider on Wednesday, however.

Jacob Coxon, a researcher who specializes in training new AI models, told The Wall Street Journal that he was leaving Anthropic out of concern the lab was racing to build bots and agents it would not be able to control. Coxon's concerns reflect a wider debate on whether AI development should be slowed and brought under regulatory oversight--as nuclear power was in the 1950s--or allowed to grow unfettered--as the Internet was.

Apple shares fell 0.3% to $315.34 after recently appointed Chief Executive John Ternus revealed the gadget maker's most consequential new product in decades. The iPhone Duo is a foldable version of the smart phone that made the Silicon Valley company one of the world's largest and it will start retailing at $1,999.

The Justice Department requested additional information from television company Fox and set-top box maker Roku, as the companies work to complete a roughly $25 billion deal. Fox Corp. and Wall Street Journal parent News Corp share common ownership.