By STAN CHOE AP Business Writer
NEW YORK (AP) — U.S. stocks are falling Friday as Wall Street stumbles toward the finish of a fifth straight losing week, which would be its longest such streak in nearly four years.
The S&P 500 sank 1.4% and deepened its losses a day after its worst drop since the war with Iran began. The Dow Jones Industrial Average was down 643 points, or 1.4%, as of 1:53 p.m. Eastern time, and the Nasdaq composite was 2% lower.
The losses are a break from Wall Street’s pattern this week, where the U.S. stock market flip-flopped from gains to losses each day as hopes rose and fell about a possible end to the war.
Moments after the U.S. stock market finished trading on Thursday, President Donald Trump offered more potential for hope. He extended a self-imposed deadline to “obliterate” Iran’s power plants to April 6 if it doesn’t fully allow oil tankers to exit the Persian Gulf through the Strait of Hormuz to the open ocean.
Oil prices eased immediately afterward in a sign of hope that some normalcy may return to the strait. It was similar to the optimism that swept global markets after Trump said Monday, just before Wall Street opened for trading, that the United States and Iran had held productive talks.
But oil prices resumed their climb as trading moved westward from Asia to Europe and back to Wall Street on Friday. Despite Trump’s latest announcement of a delay, fighting continued in the Middle East. Iran gave no signs of backing down, while Israel threatened to “escalate and expand” its attacks on Iran.
“The diplomatic dissonance this week between the U.S. and Iran dismayed investors,” said Doug Beath, global equity strategist at Wells Fargo Investment Institute. “By the end of the week, risk appetite could not withstand the fog of war.”
“Any further statements by Trump about a deal are white noise to the markets,” Jim Bianco, president and macro strategist at Bianco Research, wrote in a social media post. “Only if the IRANIANS say the talks are going well will it impact markets.”
The price for a barrel of Brent crude rose 2.9% to $104.81 and is up from roughly $70 before the war began. Benchmark U.S. crude rose 4.4% to $98.61 per barrel.
The fear in financial markets is that the war will disrupt the Persian Gulf’s energy industry for a long time. It could keep so much oil and natural gas out of the world’s markets that it sends a punishing wave of inflation through the global economy.
Not only would it raise prices for drivers buying gasoline, it could push businesses that use any trucks, ships or planes to move their products to raise their own prices. It would also make electricity from gas-fired power plants more expensive.
If the war continues until the end of June, strategists at Macquarie say the price of oil could reach $200 per barrel. The record is just above $147, reached during the summer of 2008. That’s when Iran’s testing of missiles, including one that could reach Israel, and strong demand for oil from China helped send prices spiking despite the Great Recession.
High gasoline prices and the war are already hitting confidence among U.S. consumers, whose spending makes up the bulk of the economy. Sentiment among them fell slightly more in March from February than economists expected, according to a survey by the University of Michigan.
U.S. consumers also said in the survey they’re worried about inflation jumping in the near future. They’re bracing for inflation of 3.8% in the coming 12 months, up from 3.4% in February. It’s the largest one-month increase in nearly a year.
On Wall Street, the majority of stocks fell, including three out of every five in the S&P 500. The index, which is the main measure of the U.S. stock market’s health, is more than 8% below its all-time high set early this year.
Big Tech stocks were among the heaviest weights on the market, including drops of 3.3% for Amazon and 4.5% for Meta Platforms.
Companies selling things that are not essentials, which customers could stop buying if they’re spending too much on gasoline, also sank sharply.
Norwegian Cruise Line Holdings lost 6.7%, Airbnb fell 6.1% and Lululemon Athletica dropped 4.6%.
Among the winners on Wall Street was Netflix, which added 0.4% a day after announcing price increases to its services in the United States.
In stock markets abroad, indexes fell in Europe and were mixed in Asia.
In the bond market, Treasury yields swiveled.
The yield for the 10-year Treasury rose as high as 4.48% before pulling back to to 4.42%. That’s where it was late Thursday, but it’s still well above its 3.97% level from before the war began.
The rise since the war’s start has already sent rates jumping for mortgages and for other loans taken by U.S. households and businesses, slowing the economy.
High Treasury yields and disruption in the bond market were big factors that Trump named a year ago when he backed off his initial threats for global tariffs made on “Liberation Day.” The moves caused critics to allege Trump always chickens out, or “TACO,” if financial markets show enough pain.
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AP Business Writers Chan Ho-him and Matt Ott contributed.