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News Topical, Digital Desk : Trading on Wall Street was scary on Friday and finally the US stock markets closed with a big fall. Dow Jones Industrial Average fell by about 444 points or 0.96% and closed at 45,577.47. On the other hand, S&P 500 fell by 1.51% and closed at 6,506.48. Technology stocks saw the most pressure, due to which Nasdaq Composite fell by 2.01% and closed at 21,647.61. Russell 2000 index of small stocks fell by more than 2% and reached the correction zone, that is, it came down by 10% from its recent high.
The biggest reason for this decline has been the escalating conflict in West Asia. Attacks between Iran and Israel have intensified, while Iran has also targeted energy infrastructure in the Persian Gulf.
News also emerged that the US was sending thousands of Marines to West Asia and preparations were underway for a ground operation. These developments spooked investors, leading to a sharp sell-off. The decline intensified in the afternoon when news emerged that Iraq had declared force majeure on all oilfields owned by foreign companies. This meant that there could be a major supply disruption. Following this, oil prices surged sharply. Brent crude surpassed $112 per barrel, while WTI crude surpassed $98. Brent had gained nearly 9% throughout the week, which became a major cause of concern for the market.
Rising oil prices have raised fears of a resurgence in inflation. This has led to a rise in US bond yields, further pressuring the stock market.
Investors now believe the US Federal Reserve will not cut interest rates soon, further exacerbating market weakness.
Friday's decline marked the fourth consecutive week of weakness in US markets. While the S&P 500 is still down about 7% from its recent high,
the Dow and Nasdaq entered correction territory during the day. Market experts believe that if the war escalates and oil prices remain high, the market could fall further.
Nearly all sectors were affected by this decline, but tech stocks suffered the most. Major stocks like Nvidia and Tesla fell by about 3%. Even the typically stable utility sector saw pressure.
Wall Street is currently experiencing significant uncertainty. Geopolitical tensions in West Asia, rising oil prices, and fears of inflation have combined to weaken market sentiment. Investors will now be focused on the war situation and oil prices in the coming days.
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