U.S. stock markets tumbled on Friday, with the S&P 500 and Nasdaq hitting their lowest levels in over six months, as technology shares led the sell-off and investor sentiment remained shaken by escalating conflicts in the Middle East.
The Dow Jones Industrial Average fell 619.98 points, or 1.35%, to 45,340.13, while the S&P 500 dropped 87.68 points, also 1.35%, to 6,389.48. The Nasdaq Composite slid 417.29 points, or 1.95%, to 20,990.79.
The losses came after U.S. President Donald Trump granted Iran an additional 10-day window to reopen the Strait of Hormuz, warning of potential strikes on Iranian energy facilities if negotiations fail. Despite the extension, markets remained cautious, with oil prices climbing more than 2% amid ongoing geopolitical uncertainty.
Both the S&P 500 and Nasdaq are set to close the fifth consecutive week of losses, while the Dow appears likely to end the week largely unchanged. Bill Mann, Chief Investment Strategist at Motley Fool Asset Management, noted that markets are facing “an unprecedented level of uncertainty,” adding, “The fog of war is denser than any conflict in the last 50 to 60 years.”
The CBOE Volatility Index, Wall Street’s “fear gauge,” rose 1.57 points to 29.01, reflecting heightened investor anxiety.
Technology stocks bore the brunt of the sell-off. Nvidia and Microsoft fell about 1% and 1.7%, respectively, while software-focused ETFs like the iShares Software Fund dropped 3.4%, hitting their lowest level in over a month. Alphabet shares slid 1.1%, and Meta fell 3.5%, pushing the communications services sector down 1.3%.
Rising oil prices have reignited inflation concerns, complicating the outlook for interest rate cuts by central banks. According to CME Group’s FedWatch tool, traders no longer expect any rate cuts from the Federal Reserve this year, compared to prior expectations of two reductions before the outbreak of the conflict. The likelihood of a December rate hike now stands at around 32%.
Consumer discretionary stocks fell 2%, with Carnival Corp dropping nearly 4% after lowering its full-year earnings guidance. In contrast, Unity Software surged 10.5% after reporting stronger-than-expected preliminary Q1 revenues.
Market breadth showed more decliners than advancers, with declining issues outpacing rising ones by 1.85-to-1 on the New York Stock Exchange and 2.5-to-1 on Nasdaq. The S&P 500 posted 21 new 52-week highs against 16 lows, while Nasdaq saw 21 highs versus 262 lows, highlighting the widening scope of the market downturn.
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