US stocks ended lower on Friday as losses spread beyond technology shares, while rising oil prices and renewed concerns over the US-Iran conflict added pressure to markets.
Investors also looked ahead to a busy week of corporate earnings and the Federal Reserve’s upcoming interest-rate decision.
The Dow Jones Industrial Average fell 1.25%, or about 659 points, to 52,209.16.
The S&P 500 declined 0.52% to 7,623.86, while the Nasdaq Composite lost 0.21% to close at 25,955.34.
Despite Friday’s declines, the Dow gained 0.4% over the week. The S&P 500 fell 0.5%, while the Nasdaq lost 0.7%.
Oil prices rise as Middle East tensions weigh on stocks
Energy prices climbed as renewed concerns about the conflict involving the US, Israel and Iran raised the risk of further disruption to Middle Eastern oil supplies.
West Texas Intermediate crude futures rose 3.8% to settle at $103.34 a barrel, while Brent crude gained 3.25% to $116.85. Brent’s settlement was its highest since April.
The rally followed reports that the US and Israel could be preparing plans for renewed attacks on Iran.
Iran has indicated that it is prepared to retaliate, adding to uncertainty over the conflict’s potential impact on energy markets.
The energy sector reached a record high on Friday, making it a notable exception to the broader market weakness.
However, higher oil prices also raised concerns about inflation and the potential pressure on household spending.
University of Michigan data showed US consumer sentiment slipped close to a record low in October as rising prices linked to the Middle East conflict weakened households’ views of the economy.
Dow stocks fall as weakness spreads beyond technology
Selling pressure extended across several sectors on Friday, including consumer staples, utilities and healthcare.
Financial stocks also weakened, contributing to the Dow’s decline.
American Express fell more than 3% after announcing plans to reduce its global workforce by about 5%, citing preparations for the growing use of artificial intelligence.
Caterpillar declined around 2%, while Goldman Sachs lost more than 1%.
Telecommunications stocks also came under pressure following a report that SpaceX was seeking access to thousands of cellular sites as it explores plans to become a fourth nationwide wireless carrier.
Technology shares were comparatively resilient after the previous session’s sell-off.
Microsoft edged higher, while Micron Technology gained 2.5% and Advanced Micro Devices rose 1.7%.
Investors have been reassessing the outlook for AI-related stocks amid concerns about the scale of borrowing required to finance data centres and the potential impact of higher interest rates.
However, recent corporate earnings have provided some support for the sector.
The 10-year US Treasury yield rose more than four basis points to around 4.999% on Friday, returning above the 5% level after briefly falling below it a day earlier.
Fed decision and Big Tech earnings in focus
Investors are preparing for a significant week of corporate results and monetary policy developments.
About one-third of S&P 500 companies are scheduled to report quarterly earnings next week, including Alphabet, Microsoft and Amazon.
Their capital expenditure forecasts will be closely watched for indications of whether spending on AI infrastructure will continue to expand at its current pace.
LSEG IBES data indicated that S&P 500 companies were on track to increase earnings by more than 32% in the third quarter, supporting the broader market’s gains this year.
The Federal Reserve is widely expected to leave interest rates unchanged at its Wednesday meeting.
Investors will nevertheless look for signals about whether policymakers could raise rates in December.
Markets are also monitoring the November 3 US midterm elections, which will determine control of Congress.
Together, corporate earnings, interest-rate expectations and geopolitical risks could shape the direction of US stocks in the coming week.
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