U.S. investors remained wary of surging crude oil prices. Additionally, weak economic data dampened confidence in riskier assets like equities. All three major stock indexes finished in negative territory. For the week, however, while the S&P 500 and the Nasdaq Composite posted losses, the Dow managed to end in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) dropped 1.2%, or 652.82 points, to close at 52,215.16 following a volatile session. Notably, 24 of the 30 stocks in the index finished lower, while six gained. At its lowest point during the day, the blue-chip index had fallen nearly 813 points.
The tech-heavy Nasdaq Composite slid 0.2% to end at 25,955.34, pressured by the lackluster performance of major corporations. The index had reached an intraday high of 102.72 points before retreating. The S&P 500 declined 0.5% to finish at 7,623.68.
Eight of the 11 sectors within the broad-market index closed in the red, while three finished higher. The Consumer Staples Select Sector SPDR (XLP) fell 1.9%, whereas the Energy Select Sector SPDR (XLE) climbed 2.6%.
The CBOE Volatility Index (VIX), often called the fear gauge, rose 2.2% to 19.45. Trading volume on Friday reached 15.4 billion shares, trailing the 20-session average of 17.2 billion. On the NYSE, decliners outpaced advancers by a ratio of 1.72-to-1, while the Nasdaq saw a 1.57-to-1 ratio favoring declining issues.
Spike in Crude Oil Prices
Crude oil prices hit a five-month high following reports suggesting that the United States and Israel might be planning a renewed strike against Iran. Iran has reiterated its intention to retaliate against any such aggression.
Consequently, the international benchmark, Brent crude futures, climbed 3.1% to settle at $116.72 per barrel. The U.S. benchmark, West Texas Intermediate crude futures, increased 3.8% to close at $103.27 per barrel.
Cyclical Sectors Suffer
During the first four days of last week, AI-driven technology stocks and those tied to high-tech AI infrastructure faced significant pressure. On Friday, however, cyclical sectors such as industrials, financials, and materials bore the brunt of the selling. Defensive sectors, including consumer staples, health care, and utilities, also trended downward.
Because the Dow is heavily weighted toward cyclical stocks, it experienced a substantial decline. Shares of American Express Co. (AXP) fell 3.7% after the company announced plans to cut 5% of its global workforce to prepare for the integration of AI technology.
