US stocks slid from record highs on Friday, joining a global downturn as oil prices surged and bond yields jumped on escalating fears over the Iran war. The S&P 500 fell 0.9% from its all-time high, the Dow Jones Industrial Average dropped 331 points, and the Nasdaq composite sank 1.4% from its own record. Technology stocks, particularly those tied to artificial intelligence, led the market lower after soaring to heights that some critics deemed excessive.
Oil Prices Continue to Rise
Oil prices climbed more than 3% early Friday, with Brent crude reaching $109.11 per barrel and US crude rising to $104.94. The surge came as US-Iran talks on ending the war stalled and after a ship off the UAE was seized and another near Oman was attacked. The Strait of Hormuz remains largely closed, and the US has imposed a sea blockade on Iranian ports since last month. The White House said both the US and China agreed the strait must remain open.
Global Markets Retreat
In Europe, Britain's FTSE 100 fell 1.2%, France's CAC 40 dropped 1.2%, and Germany's DAX lost 1.5%. Asian markets also declined, with Tokyo's Nikkei 225 falling 2%, Hong Kong's Hang Seng down 1.6%, and the Shanghai Composite off 1%. South Korea's Kospi gave up earlier gains, dropping 6.1% after reaching an all-time high of 8,046.78 earlier in the day.
Bond Yields Jump on Inflation Worries
Yields in the bond market jumped as investors worried that higher oil prices could worsen inflation. The yield on the 10-year US Treasury note rose significantly, reflecting concerns that the Iran conflict could further strain global supply chains and push prices higher.
Trump's China Summit Wraps Up
US President Donald Trump concluded his summit in Beijing with Chinese leader Xi Jinping, with discussions covering trade, economic cooperation, and Taiwan. Trump said China could buy US oil, more than a year after Beijing stopped purchases following US tariffs. Xi reportedly offered to help broker an end to the Iran war. However, analysts expressed skepticism about the deals, recalling that many promises from Trump's 2017 China visit did not materialize.
Wall Street Records Short-Lived
On Thursday, Wall Street had reached new highs, with the S&P 500 rising 0.8% to 7,501.24 and the Dow closing above 50,000 for the first time since the Iran war began. The Nasdaq climbed 0.9%. Cisco Systems jumped 13.4% after better-than-expected results and job cuts, while Nvidia rose 4.4% on hopes of H200 chip sales to China.
Currency markets saw the US dollar strengthen to 158.54 Japanese yen, while the euro fell to $1.1622.
