U.S. Gas Prices, Mortgage Rates, and Stock Market Decline One Month After Military Operations Against Iran Begin

By DCNF Staff

One month after U.S. military operations against the Iranian regime commenced on February 28 under Operation Epic Fury, U.S. gas prices have increased, mortgage rates have risen, and major stock indices have declined, according to reports from Axios, the American Automobile Association (AAA), and the Wall Street Journal (WSJ).

The average U.S. price for a gallon of regular gasoline stood at $2.85 in February 2026 prior to the strikes, according to AAA data. Two days before the operations began, on February 26, the price was $2.98 per gallon. By early March, it had reached $3.11, reflecting an overnight increase of 11 cents in some areas. Axios reported on March 28 that the price had climbed to $3.98 per gallon on Saturday, a rise of one dollar from late February levels. This increase occurred against a backdrop of lower pre-war prices following a drop in 2025.

The Strait of Hormuz, through which about 20% of global oil demand passed before the conflict, saw tanker traffic drop to nearly zero after the operations started, contributing to higher oil prices, Axios noted. Analysts have projected potential prices around $4 per gallon, though from a relatively low base.

*(Image: Tankers at Khor Fakkan Container Terminal along the Strait of Hormuz on June 23, 2025. Photo by GIUSEPPE CACACE/AFP via Getty Images)*

Over the four weeks following the start of operations, average U.S. 30-year fixed mortgage rates increased from 5.98% on February 26 to 6.38% by late March, the highest since September 2025, WSJ reported on March 26. The Federal Reserve held its key federal funds rate steady at 3.5%-3.75% during its March 2026 meeting, with median projections indicating one 0.25% rate cut by year-end.

Oil price increases linked to the conflict have led analysts to anticipate that the Fed will maintain or adjust rates cautiously rather than cut them soon, according to WSJ. Futures markets on March 28 showed a 52% probability of a Fed rate increase before the end of 2026, up from prior expectations and the first time such a hike appeared more likely than not, per CNBC.

The stock market lost more than $3 trillion in market capitalization since February 28, a decline of over 7% from January levels, Axios reported. Over the four-week period, the S&P 500 fell 7.4%, the Dow Jones Industrial Average dropped 7.8%, and the Nasdaq Composite declined 7.6%. Some indices have shown partial rebounds following delays in escalation, according to market data.

*(Related: Analysts Predict Lingering Economic Effects After Iran Operations Conclude)*

Trump administration officials have described these changes as short-term effects of the operations. Treasury Secretary Scott Bessent, in an NBC News "Meet the Press" interview with Kristen Welker on March 22, stated that Americans would "understand" that "50 days of temporary elevated prices" represent a short-term cost for securing "50 years of not having an Iranian regime with a nuclear weapon." Bessent added, "The American people are beginning to understand, thanks to President Trump, that there is no prosperity without security."

*(Image: U.S. Treasury Secretary Scott Bessent speaks to journalists in Paris on March 16, 2026. Photo by Ludovic MARIN / AFP via Getty Images)*

The White House did not immediately respond to a request for comment from the Daily Caller News Foundation.

The operations began during a period of unified Republican control of Congress following President Trump's 2024 election victory, in which he had campaigned against involvement in new wars. Affordability and cost-of-living issues have been prominent in midterm campaigns leading up to the November 2026 elections, now about seven months away.

Democrats have emphasized these concerns in recent races. In Florida's 2025 elections, held before the operations began, Democratic State Rep. Emily Gregory flipped a Republican-held district including President Trump's Mar-a-Lago residence. Speaking to CNN's Erin Burnett on election night, Gregory said voters focused on the cost of living, adding, "Everyone is feeling that affordability crisis, and the last thing that Florida families needed when they’re struggling is $4 gas."

The developments come amid broader economic discussions, with some analysts noting short-term volatility tied to geopolitical events while projecting longer-term stabilization depending on the conflict's resolution.

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