US stocks fall as investors weigh an economic slowdown and oil surges to a 13-week high

• US stocks fell Wednesday as investors weigh economic concerns and surging oil prices.
• Both Goldman Sachs and Bank of America have predicted crude prices will pass $140 a barrel.

US stocks dropped Wednesday, as investors continued to fret over the prospect for the economy and as oil jumped to a 13-week high.

Brent crude jumped more than 2% to $123 a barrel, and West Texas Intermediate rose to $122 a barrel. Prices at the pump, meanwhile, have surged to record highs in the US amid summer driving season.

The Nasdaq Composite traded briefly higher in the session before falling, while the S&P 500 and Dow Jones Industrial Average saw losses accelerate throughout the day.

Here's where US indexes stood as the market closed 4:00 p.m. on Wednesday:

• S&P 500: 4,115.72, down 1.08%

• Dow Jones Industrial Average: 32,910.38, down 0.81% (269.76 points)

• Nasdaq Composite: 12,086.27, down 0.73%

There's about a 50% chance of a US recession, Nobel laureate economist Robert Shiller told Bloomberg Wednesday, as Americans could see a self-fulfilling prophecy as everyone worries about a downturn.

Alibaba stock jumped 12% as China approved new video games, signaling that Beijing is easing up on its tech crackdown. China reportedly approved 60 new games, the most in nearly a year.

Twitter stock also climbed after the social media company reportedly plans to provide Elon Musk with a trove of data to disprove his theory about bots a fake accounts on the platform.

Short-bets against meme stocks have soared as GameStop's stock price has stabilized. Short interest as a percentage of total shares outstanding has soared more than 135% for GameStop since late December.

As oil markets continue to reel, Goldman Sachs and Bank of America both predicted prices will surpass $140 a barrel — a milestone that DataTrek analysts say could trigger a recession.

OPEC+ announced a production boost last week, but crude prices are unlikely to come down, analysts told Insider. They explained that even if production increases, those barrels may not even hit the global market.

But stocks are set to return to their 2022 highs even if oil hits $135 a barrel, according to JPMorgan's Marko Kolanovic. He told CNBC that rising costs won't be a headwind for stocks moving forward.

Meanwhile, Galaxy Digital's Mike Novogratz said two-thirds of crypto hedge funds are set to fail, thanks to the massive sell-off triggered by Fed tightening. He thinks there's more turmoil ahead for crypto as the easy-money policy era comes to a close.

Gold edged higher 0.21% to 1,856.20 per ounce. The 10-year yield rose 0.57 basis points to 3.027%.

Bitcoin slipped about 2% to $30.188.14.