Here's how the U.S.-Iran war is already hitting consumers' pocketbooks

While the U.S. war with Iran is playing out thousands of miles away, American consumers are already feeling financial ripple effects.

The U.S.-Israeli strikes on Iran over the weekend gave way to a week with topsy-turvy markets, spiking mortgage rates and higher prices at the pump. These changes can drag on already-lackluster consumer sentiment while further elevating affordability as a leading political issue.

“Wars are never good for consumer sentiment,” said Mark Brennan, an associate professor at New York University's Stern School of Business. “They might be good for munitions, manufacturers and lobbyists and all these clowns, but not good for the average consumer.”

An average gallon of gas in the U.S. hit $3.25 on Thursday, according to AAA. The one-week jump of 27 cents is similar to what was seen during the onset of the Russian invasion of Ukraine in 2022, the organization said.

Gas' 8.5% increase over three days is the largest since Hurricane Katrina devastated New Orleans in 2008, according to an analysis from Bespoke Investment Group.

With Friday's jump in oil prices, gas prices are set to climb even further. Gasoline futures trading in New York were up another 2% on Friday.