United States equities closed lower on Thursday (Friday AEDT) as rising oil prices and continued uncertainty surrounding negotiations with Iran weighed on investor sentiment.
The Dow Jones Industrial Average fell 469.4 points or 1% to close at 45,960.1. The S&P 500 declined 114.7 points or 1.7% to 6,477.2, while the tech-heavy Nasdaq Composite dropped 521.7 points or 2.4% to 21,408.1, confirming it has entered correction territory after falling nearly 11% from its record high close on 29 October.
Energy markets were a key driver of the downturn, with crude prices surging amid escalating geopolitical tensions. Brent crude futures jumped 5.7% to settle at US$108.01 per barrel, while West Texas Intermediate crude rose 4.6% to $94.48.
The spike in oil prices has heightened concerns about inflationary pressures and the potential impact on global economic growth.
Speaking on the recent rally in oil, U.S. President Donald Trump sought to downplay the risks, stating that price increases and broader market pressures were not as severe as anticipated. “It’s all going to come back down to where it was and probably lower,” he said.
However, rhetoric surrounding the ongoing conflict added to market unease. Earlier in the day, Trump warned in a social media post that Iran “better get serious soon, before it is too late”, cautioning that failure to reach an agreement could lead to further escalation.
He also described Iranian negotiators as “very different” and “strange”, claiming they were “begging” the United States for a deal to end the four-week conflict.
Despite these comments, signals from Tehran appeared less conciliatory. Iran’s foreign minister reportedly indicated that authorities are reviewing a U.S. proposal to end the war but reiterated that the country has no intention of engaging in direct talks with Washington.
Tensions were further heightened after Gulf nations issued a joint statement condemning Iran’s strikes on regional energy infrastructure, describing them as “criminal”.
The market pullback follows a positive session on Wall Street, with the Dow still on track for a weekly gain despite conflicting developments regarding potential peace negotiations.
In fixed income markets, yields moved higher, with the U.S. 10-year Treasury yield rose 1.9% to 4.416%, while the 2-year yield climbed 2.6% to 3.986%.