United States equity markets extended their recent sell-off on Friday, as surging oil prices and ongoing geopolitical tensions in the Middle East weighed heavily on investor sentiment, pushing key indices deeper into correction territory.
The Dow Jones Industrial Average dropped 793.5 points, or 1.7%, to close at 45,166.6, leaving the blue-chip index approximately 10% below its recent closing high.
The S&P 500 fell 108.3 points, or 1.7%, to 6,368.9, marking a seven-month low, while the Nasdaq Composite declined 459.7 points, or 2.2%, to finish at 20,948.4.
On a weekly basis, the Dow shed 0.9%, while the S&P 500 recorded its fifth consecutive weekly decline, falling 2.1%. The technology-heavy Nasdaq underperformed, sliding 3.2% over the same period.
The latest downturn follows confirmation that the Nasdaq has entered a correction, now nearly 13% below its October peak. The Dow also briefly moved into correction territory during Friday’s session, while the S&P 500 remains down 8.7% from its record close.
Investor concerns have been driven largely by a sharp escalation in energy prices. International benchmark Brent crude rose 3.37% to settle at $105.32 per barrel, while U.S. West Texas Intermediate climbed 5.46% to $99.64 per barrel.
Geopolitical developments remained in focus after U.S. President Donald Trump announced a delay to a potential strike on Iran’s energy infrastructure, extending the deadline to 6 April.
The move is widely seen as an attempt by the administration to ease tensions and stabilise energy markets, as rising fuel costs begin to weigh on consumers and carry potential political consequences ahead of upcoming elections.
Within equity markets, declines were broad-based, with megacap technology stocks leading the losses. Nvidia fell 2.2%, acting as the largest drag on the S&P 500, while Amazon dropped 4%.
Sector performance reflected the pressure from both rising costs and weakening consumer sentiment. Consumer discretionary stocks led declines, falling 3.1%, as cruise operators came under significant selling pressure.
Carnival dropped 4.3% after lowering its full-year adjusted profit forecast, while Norwegian Cruise Line Holdings slid 6.9%.
The surge in oil and related commodities, including fertilisers, has intensified inflation concerns, complicating the outlook for monetary policy. Market participants have sharply revised expectations for the U.S. Federal Reserve, with interest rate cuts now largely priced out for the remainder of the year.
According to the CME Group FedWatch Tool, traders are no longer anticipating easing in 2026, a marked shift from earlier expectations of two rate cuts prior to the escalation of the Iran conflict.
Instead, markets are now assigning a 23.2% probability of at least a 25 basis point rate increase at the Fed’s October meeting.
Economic data released during the session added to the cautious tone. U.S. consumer sentiment fell to a three-month low in March. amid growing concerns about the economic impact of higher energy costs and geopolitical uncertainty.
In fixed-income markets, Treasury yields were mixed. The 10-year yield edged up 0.4% to 4.428%, while the 2-year yield declined 1.7% to 3.914%.
