Major United States equity benchmarks fell sharply on Friday, capping a fourth consecutive week of losses, as escalating tensions in the Middle East and surging oil prices continued to weigh heavily on investor sentiment.
The Dow Jones Industrial Average dropped 444.0 points, or 1%, to close at 45,577.5. The S&P 500 declined 100.0 points or 1.5% to 6,506.5, while the Nasdaq Composite slid 443.1 points or 2% to finish at 21,647.6.
Markets were rattled by the ongoing conflict involving Iran and Israel, with no signs of de-escalation. The United States increased its military presence in the region, deploying an amphibious assault ship alongside thousands of additional Marines and sailors.
The geopolitical backdrop worsened after continued exchanges of strikes between Iran and Israel, alongside fresh Iranian attacks targeting energy infrastructure in the Persian Gulf.
Selling pressure intensified in afternoon trade following reports that Iraq had declared force majeure on all oilfields operated by foreign companies.
The development triggered a sharp spike in crude prices, with Brent crude settling 3.3% higher at US$112.19 per barrel and West Texas Intermediate climbing 2.8% to $98.23 per barrel.
Technology heavyweights led the declines, with Nvidia and Tesla falling 3.3% and 3.2% higher, respectively.
Shares in Alphabet fell 2%, Meta Platforms lost 2.2%, and Microsoft dropped 1.8%.
In corporate news, Super Micro Computer plunged 33.3% after three individuals linked to the artificial intelligence server maker were charged with smuggling at least $2.5 billion worth of AI technology to China.
Meanwhile, FedEx provided a rare bright spot, with shares rising 0.8% after the company issued upbeat forecasts and said global demand remained resilient despite mounting geopolitical tensions.
Adding to the pressure, rising concerns over inflation and the prospect of delayed interest rate cuts from the Federal Reserve pushed Treasury yields higher.
The 10-year yield rose 3.2% to 4.384%, while the 2-year yield climbed 3% to 3.907%.
