U.S. stock markets experienced further declines on Friday, concluding a fifth consecutive week of losses, marking the longest losing streak in nearly four years. The S&P 500 dropped by 1.7%, marking its worst performance since the onset of the conflict with Iran. The Dow Jones Industrial Average also fell by 1.7%, losing 793 points and dropping over 10% from its previous record high. Similarly, the Nasdaq composite declined by 2.1%.
The Dow’s decline now confirms a correction, defined as a 10% drop from a previous peak, following the Nasdaq’s similar correction the previous day. This week, Wall Street saw fluctuations between gains and losses as optimism about potential resolution to the conflict ebbed and flowed.
Conversely, in Canada, the main stock index closed marginally higher, bolstered by gains in the basic materials sector. The S&P/TSX composite index ended the day up 73.13 points at 31,960.65.
Following Thursday’s trading session, U.S. President Donald Trump provided a glimmer of hope by extending the deadline for potential action against Iran to April 6. Despite this, conflict persisted in the Middle East, with Iran showing no signs of backing down and Israel threatening further escalation.
Oil prices initially retreated after Trump’s announcement, hinting at a potential easing of tensions in the Strait of Hormuz. However, prices rebounded later in the day. Brent crude prices rose by 3.4% to $105.32 per barrel, up from around $70 before the conflict began, while U.S. crude climbed 5.5% to $99.64 per barrel.
Concerns loom over the potential prolonged disruption of oil and gas production in the Persian Gulf due to the conflict, which could lead to inflationary pressures globally. Analysts at Macquarie warn that if the conflict persists until the end of June, oil prices could soar to $200 per barrel, a record high.
In the U.S. stock market, most stocks, including major tech companies like Amazon and Meta Platforms, experienced declines. Non-essential goods sellers, such as Norwegian Cruise Line Holdings and Starbucks, also saw sharp drops. Overseas, European markets fell, following a mixed performance in Asia.
Bond markets witnessed fluctuating Treasury yields, with the 10-year Treasury yield briefly hitting 4.48% before retreating to 4.43%. The rise in yields has already impacted mortgage and loan rates, potentially slowing economic growth. Trump’s past actions in response to market turmoil were scrutinized, with critics accusing him of faltering under pressure.