U.S. stocks sank again Friday, extending Wall Street’s fifth straight losing week as investors focused on how the Iran war could affect energy supplies and global prices. The S&P 500 finished down 1.7%, marking its worst week since the war with Iran began, while the Dow dropped 793 points, or 1.7%, and the Nasdaq composite slid 2.1%.
The selloff capped a stretch that analysts said also reflected a shift from the market’s earlier pattern this week. After trading flip-flopped between gains and losses as hopes rose and fell about a possible end to the war, investors retreated as conflict in the Middle East continued.
President Donald Trump’s latest remarks added to the day’s whipsaw. Moments after U.S. markets closed Thursday, Trump extended a self-imposed deadline to “obliterate” Iran’s power plants to April 6 if Iran does not fully allow oil tankers to exit the Persian Gulf through the Strait of Hormuz to the open ocean. Oil prices eased immediately afterward, a move Reuters said at the time was read as hope for a return to “normalcy” for the strait and similar to the relief Monday, when oil fell 10% after Trump first delayed that deadline.
But that early easing faded as the trading day progressed from Asia to Europe and then back to Wall Street on Friday. Brent crude rose 3.4% to settle at $105.32, and benchmark U.S. crude gained 5.5% to settle at $99.64 per barrel. The article noted that oil prices had been around $70 per barrel before the war began, and it said the renewed climb came even after Trump’s April 6 extension.
Investors also kept a close eye on military and diplomatic signals from the region. The reporting said fighting continued in the Middle East, that Iran showed no sign of backing down, and that Israel threatened to “escalate and expand” its attacks on Iran. In comments to the market, Doug Beath, global equity strategist at Wells Fargo Investment Institute, said: “The diplomatic dissonance this week between the U.S. and Iran dismayed investors,” adding: “By the end of the week, risk appetite could not withstand the fog of war.”
Jim Bianco, president and macro strategist at Bianco Research, similarly pointed to skepticism about the impact of further statements. In a social media post, Bianco wrote: “Any further statements by Trump about a deal are white noise to the markets,” and added: “Only if the IRANIANS say the talks are going well will it impact markets.”
The pressure on stocks extended beyond index-level moves to broad selloffs across sectors. The report said three out of every four companies in the S&P 500 fell, and that Big Tech helped pull the market lower, including drops of 4% for Amazon, 4% for Meta Platforms and 2.2% for Nvidia. It also said companies whose products are not considered essentials fell sharply, including Norwegian Cruise Line Holdings (down 6.9%), Starbucks (down 4.8%) and Chipotle Mexican Grill (down 4.1%).
The declines also reflected concerns about how an extended disruption in the Persian Gulf’s energy industry could feed through to the real economy. The report said the fear in financial markets is that the war will keep enough oil and natural gas out of global supply for long enough to trigger inflation pressures, raising costs not only for gasoline, but also for businesses that rely on trucks, ships or planes, and for electricity from gas-fired power plants.
The article further tied the market slide to interest rates and borrowing costs. In the bond market, the 10-year Treasury yield rose as high as 4.48% before pulling back to 4.43%, compared with 4.42% late Thursday and 3.97% before the war began. The report said higher Treasury yields have already pushed mortgage and other loan rates higher, slowing the economy, and it linked that dynamic to how Trump previously backed off initial threats for global tariffs after financial markets showed enough pain.
After Friday’s closing losses, the index numbers underscored the depth of the correction mood among investors. The S&P 500 fell 108.31 points to 6,368.85, the Dow dropped 793.47 to 45,166.64, and the Nasdaq composite sank 459.72 to 20,948.36. The reporting said the Dow and Nasdaq were each down more than 10% from their records set last month, a “correction” by the term used by professional investors.