U.S. stocks tumble as Middle East tensions continue

U.S. stocks fell on Friday, with all three major indexes closing at their lowest in over seven months, as ongoing tensions in the Middle East dampened investor confidence.The Dow confirmed it has entered correction territory, reflecting a more than 10% drop from its record high in February.

Stocks decline sharply

U.S. President Donald Trump has given Iran ten days to reopen the Strait of Hormuz, threatening military action if it does not comply.

Secretary of State Marco Rubio stated the U.S. can meet its objectives in Iran without ground troops, anticipating a resolution within weeks, despite increased troop deployments.

U.S. crude prices rose 5.46% to $99.64 a barrel, while Brent crude increased 4.22% to $112.57, though both were relatively unchanged for the week.

The Dow, S&P 500, and Nasdaq have now recorded five consecutive weekly declines, the longest streak in nearly four years.

Having dropped over 10% from its February 10 peak, the Dow joins the Nasdaq in confirming a correction, with the Russell 2000 previously marking this decline.

Megacap stocks heavily impacted the S&P index, with Nvidia down 2.2% and Amazon falling 4%.

Software stocks faced renewed selling pressures, with the S&P 500 software index closing at its lowest since November 6, 2023.

Consumer discretionary stocks fell 3.1%, making it the worst-performing sector as cruise operators like Carnival and Norwegian faced significant losses.

The rising oil prices and associated products have heightened inflation concerns, limiting expectations for potential interest rate reductions by central banks.