Stocks tumbled in volatile trading Friday as the U.S.-Israel conflict with Iran showed no sign of abating and oil prices continued their ascent.
TheDow Jones Industrial averageshed 443.96 points, or 0.96%, ending at 45,577.47. TheS&P 500fell 1.51% and closed at 6,506.48, while theNasdaq Compositelost 2.01% and settled at 21,647.61. The small-capRussell 2000declined more than 2% and slipped intocorrection territory— that is, a 10% decline from its latest high. At their lows of the day, the Dow and Nasdaq traded in correction territory, but ultimately closed shy of the 10% threshold.
The moves come after Iran and Israel exchanged strikes overnight, while the former also launched new attacks against energy sites in the Persian Gulf region.The Wall Street Journal reported, citing U.S. officials, that the Pentagon is sending thousands of additional Marines to the Middle East. CBS Newssaid"heavy preparations" were being made for sending ground troops to Iran, citing multiple sources.
The selling ramped up in the afternoon, after Reutersreportedthat Iraq hasdeclared force majeureon all oilfields operated by foreign companies. This caused oil prices to climb, with Brent crude topping $113 a barrel at its high of the day and WTI oil trading over $98 a barrel.
"If this is an escalation involving troops on the ground, then we're probably in for at least a couple more weeks of this sort of market of higher oil prices, high gas prices; you're hanging on every headline about energy infrastructure in the region," Baird investment strategist Ross Mayfield said to CNBC. "Quite frankly, equity markets haven't sold off in a way that would reflect this sort of event yet, so there could still be some some downside ahead."
Meanwhile, fears that inflation is reigniting and that rate cuts from the Federal Reserve are off the table pushed Treasury yields higher on Friday, further contributing to the stock market's weakness.
The major averages posted their fourth losing week in a row. The S&P 500 has held up better than the other benchmarks, down just 7% from its recent high.
"It's not unusual in the environment we're in, with the amount of uncertainty we have, to have a 10% correction in any index," said B. Riley's Art Hogan. "So, to the extent that the S&P is broader and more diverse, it's probably going to be the last to fall. But it's also indicative of the fact that we're in a very uncertain time."
The selling was broad on Friday with tech leaders of the bull market seeing the biggest losses. Nvidia and Tesla lost 3% apiece. Few sectors were safe as rising yields also hit normally staid utilities.
— CNBC's Sean Conlon and Yun Li contributed reporting.
Source: Drudge Report
