U.S. stocks plunged for a fifth consecutive week, marking the longest losing streak in nearly four years, as escalating Middle East tensions, soaring oil prices, and inflation fears rattled investors despite President Trump's attempts to de-escalate.
U.S. stocks deepened their drops, finishing off a fifth straight losing week, its longest such streak in nearly four years. Despite President Donald Trump extending a deadline for Iran regarding oil tankers in the Strait of Hormuz, initially causing oil prices to ease, tensions quickly resumed. Oil prices resumed their climb as fighting continued in the Middle East, with Iran showing no signs of backing down and Israel threatening to escalate attacks. Brent crude oil climbed 3.4% to $105.32, and benchmark U.S. crude rose 5.5% to $99.64 per barrel, significantly up from pre-war levels. Analysts cited 'diplomatic dissonance' and the 'fog of war' as key factors dismaying investors. The primary fear in financial markets is that the war will disrupt the Persian Gulf’s energy industry for a long time, potentially sending a punishing wave of inflation through the global economy, raising prices for gasoline, transportation, and electricity. Strategists at Macquarie suggest oil could reach $200 per barrel if the war continues until the end of June. Consumer confidence in the U.S. also fell slightly more than expected. On Wall Street, most stocks fell, with the S&P 500 dropping 1.7%, the Dow Jones Industrial Average falling 793.47 points, and the Nasdaq composite sinking 459.72 points. Both the Dow and Nasdaq are now down more than 10% from their records, a 'correction.' Big Tech stocks like Amazon, Meta Platforms, and Nvidia, along with companies selling non-essentials (e.g., Norwegian Cruise Line, Starbucks, Chipotle), were among the heaviest weights. International stock markets also saw declines. In the bond market, Treasury yields rose, impacting rates for mortgages and other loans, further slowing the economy.
