Stocks wavered on Wall Street Friday and oil prices eased ahead of planned U.S.-Iran talks following a shaky ceasefire agreement.
The S&P 500 fell 0.1% in afternoon trading, on pace for a weekly loss. The Dow Jones Industrial Average fell 271 points, or 0.6%, as of 3:21 p.m. Eastern. The Nasdaq composite rose 0.4%.
Major indexes have been gaining ground over the last two weeks amid optimism that the war with Iran could be heading toward a resolution.
The S&P 500 has erased most of its losses from March and is just 2.3% short of its all-time high set in January. The market is still prone to big swings on developments around the war.
Trading on Wall Street remained choppy. Most companies in the benchmark S&P 500 were losing ground, with health care stocks driving much of the decline. Eli Lilly and Co. fell 1.8% and Johnson & Johnson slid 1.3% lower.
Technology stocks with hefty values helped offset losses elsewhere. Nvidia rose 3% and Broadcom rose 5.3%.
Markets in Asia gained ground while markets in Europe were mixed.
Oil prices have been behind many of the stock market’s sharp movements. Oil prices have surged as shipping through the vital Strait of Hormuz essentially stalled since the war began.
Brent crude oil, the international standard, has gone from roughly $70 per barrel before the war in late February to more than $119 at times. Brent for June delivery fell 0.8% to $95.20 per barrel Friday.
A barrel of U.S. crude oil for May delivery dropped 1.3% to $96.57.
Negotiators from Iran and the U.S. are preparing for high-level talks on Saturday. The situation remains uncertain. Iran’s semiofficial Tasnim news agency claimed that talks wouldn’t happen unless Israel stopped its attacks in Lebanon.
The conflict is behind surging inflation in the U.S. in March. The government reported the biggest spike in inflation in four years as prices at the gas pump jumped. But, the inflation increase was just short of what economists expected.
Bond yields held mostly steady following the latest inflation update. The yield on the 10-year Treasury rose to 4.31% from 4.29% late Thursday.
Inflation has been a lingering concern for economists. Prices on a range of consumer goods and services are already stubbornly high, in part from the impact of extensive global tariffs. Higher gas prices are immediately felt by drivers at the pump, but they could eventually raise prices on everything from food to airfare as companies pass along higher costs for shipping and fuel.
Analysts are warning that there might be a drawn out impact from the oil supply shock in the months ahead.
“While I’m glad to see the effects to be less than expected in March, the effects in April are now more likely to be worse,” Jamie Cox, managing partner for Harris Financial Group, wrote in a research note.
Consumer sentiment slumped 10.7% percent in April, according to a closely watched monthly survey from the University of Michigan. It also shows that consumers are growing more worried about inflation, with year-ahead expectations surging to 4.8% in April from 3.8% in March.
Inflation remains a major concern for the Federal Reserve, which has signaled more caution amid worries about inflation reheating. The rate of inflation remains above the central bank's 2% target. The threat of rising inflation will likely mean the central bank continues to hold interest rates steady. Several Fed officials have also said a rate hike may be needed if inflation doesn’t cool.
Lower interest rates help boost stocks and other investments by lowering borrowing costs. Interest rate cuts also risk worsening inflation.
