NEW YORK (AP) — U.S. stocks closed out their worst week since the Iran war began and their fifth losing week in a row. The S&P 500 fell 1.6% and is now 8.7% below the all-time high it reached in January. The Dow Jones Industrial Average dropped 1.7%, and the Nasdaq composite sank 2.1%. Crude oil prices rose again with no clear end in sight for the conflict. Investors fear that the war will disrupt the Persian Gulf’s energy industry for a long time,
setting off a punishing wave of global inflation by keeping large amounts of oil and natural gas out of global markets.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — U.S. stocks are falling Friday as Wall Street stumbles toward the finish of a fifth straight losing week, which would be its longest such streak in nearly four years.
The S&P 500 sank 1.6% and deepened its losses a day after its worst drop since the war with Iran began. The Dow Jones Industrial Average was down 765 points, or 1.7%, with a little less than an hour remaining in trading, and the Nasdaq composite was 2.1% lower.
The losses are a break from Wall Street’s pattern this week, where the U.S. stock market flip-flopped from gains to losses each day as hopes rose and fell about a possible end to the war.
Moments after the U.S. stock market finished trading on Thursday, President Donald Trump offered more potential for optimism. He extended a self-imposed deadline to “obliterate” Iran’s power plants to April 6 if it doesn’t fully allow oil tankers to exit the Persian Gulf through the Strait of Hormuz to the open ocean.
Oil prices eased immediately afterward in a sign of hope that some normalcy may return to the strait. It was similar to the relief that swept global markets after Trump said Monday, just before Wall Street opened for trading, that the United States and Iran had held productive talks.
But oil prices resumed their climb as trading moved westward from Asia to Europe and back to Wall Street on Friday. Despite Trump’s latest announcement of a delay, fighting continued in the Middle East. Iran gave no signs of backing down, and Israel threatened to “escalate and expand” its attacks on Iran.
“The diplomatic dissonance this week between the U.S. and Iran dismayed investors,” said Doug Beath, global equity strategist at Wells Fargo Investment Institute. “By the end of the week, risk appetite could not withstand the fog of war.”
“Any further statements by Trump about a deal are white noise to the markets,” Jim Bianco, president and macro strategist at Bianco Research, wrote in a social media post. “Only if the IRANIANS say the talks are going well will it impact markets.”
The price for a barrel of Brent crude oil rose 3.4% to settle at $105.32. That's up from roughly $70 just before the war began. Benchmark U.S. crude rose 5.5% to settle at $99.64 per barrel.
The fear in financial markets is that the war will disrupt the Persian Gulf's energy industry for a long time. It could keep so much oil and natural gas out of the world’s markets that it sends a punishing wave of inflation through the global economy.
Not only would it raise prices for drivers buying gasoline, it could push businesses that use any trucks, ships or planes to move their products to raise their own prices. It would also make electricity from gas-fired power plants more expensive.
If the war continues until the end of June, strategists at Macquarie say the price of oil could reach $200 per barrel. The record is just above $147, set during the summer of 2008. That’s when Iran’s testing of missiles, including one that could reach Israel, and strong demand for oil from China helped send prices spiking despite the Great Recession.
High gasoline prices and the war are already hitting confidence among U.S. consumers, whose spending makes up the bulk of the economy. Sentiment among them fell slightly more in March from February than economists expected, according to a survey by the University of Michigan.
On Wall Street, the majority of stocks fell, including three out of every four in the S&P 500. The index, which is the main measure of the U.S. stock market's health, is 8.7% below its all-time high set early this year.
Big Tech stocks were among the heaviest weights on the market, including drops of 3.8% for Amazon, 4.4% for Meta Platforms and 2.2% for Nvidia.
Companies selling things that are not essentials, which customers could stop buying if they're spending too much on gasoline, also sank sharply. Norwegian Cruise Line Holdings lost 7.2%, Starbucks dropped 4.5% and Lululemon Athletica sank 3.8%.
In stock markets abroad, indexes fell in Europe following a mixed finish in Asia.
In the bond market, which has helped influence Trump's actions in the past, Treasury yields swiveled.
The yield for the 10-year Treasury rose as high as 4.48% Friday before pulling back to to 4.44%. That's up from 4.42% late Thursday and from just 3.97% before the war began. The rise has already sent rates jumping for mortgages and for other loans taken by U.S. households and businesses, slowing the economy.
High Treasury yields and disruption in the bond market were big factors that Trump named a year ago when he backed off his initial threats for global tariffs made on “Liberation Day.” The moves caused critics to allege Trump always chickens out, or “TACO,” if financial markets show enough pain.
On Monday, after Trump announced the first delay to his deadline for bombing Iranian power plants, Treasury yields briefly eased when relief flowed through financial markets worldwide. The S&P 500 jumped 1.1% that day as oil prices fell by more than 10%.
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AP Business Writers Chan Ho-him and Matt Ott contributed.
