The Dow fell more than 200 points and the S&P 500 slid 1.3% on Wednesday morning as oil took a 4% hit and slide to $30.60 a barrel.
The latest oil slip arrives after Saudi Arabia ruled out the idea of cutting production due to deep distrust among oil producing nations.
Iran this week also called oil production freezes a “joke” that would do nothing to slow the global supply glut.
Iran has promised to increase its own production in order to gain back some of the marketshare it lost under US sanctions.
The stock markets are obsessed with the downsides of cheap oil and they have struggled to turn a positive week in recent months.
In 2016, oil and the S&P 500 have moved together 87% of the time, according to CNNMoney.
When oil prices climbed to $33.50 a barrel last week, the Dow soared by 418 points.
With oil prices sinking against this week, stocks are also falling quickly at Chevron, Transocean, and Hess.
Benchmark United States crude oil futures dropped $1.15 to $30.72 a barrel on the New York Mercantile Exchange. The contract fell $1.52 on Monday. Brent crude, which is used to price oils internationally, fell 82 cents to $33.15 a barrel in London.
“The disappearance of risk appetite after last week’s positive performance can be traced to bad news around oil once again,” Bernard Aw, a market strategist at IG, told The New York Times.