Dow drops as oil prices surge on renewed Middle East fighting fears

Blue chip stocks sold off Friday as investors weighed rising tensions between Iran and the US alongside a fresh surge in oil prices. The Dow Jones Industrial Average briefly fell as much as 800 points before paring losses, while Business Insider’s headline noted a 600-point drop. The pressure came one day after a sharp rout in the Nasdaq 100, showing market stress spreading beyond the AI and tech trade.

Brent crude jumped nearly 4% to $117 a barrel, not far from an earlier wartime peak of around $122 a barrel. West Texas Intermediate crude rose 2%, breaking back above the $100-a-barrel mark. The article points to oil as a key driver of Friday’s market losses, as traders considered whether a prolonged conflict could keep pressure on energy markets and risk assets.

Around 1:45 p.m. ET Friday, the S&P 500 was down 0.43% at 7,630.34, while the Dow was down 1.15% at 52,257.98, a decline of 610 points. The Nasdaq 100 was up 0.17% at 29,008.64, and the iShares Semiconductor ETF added 1% after dropping 6% Thursday. That rebound followed renewed anxiety about AI capital spending tied to companies including Tesla and Meta.

Bond yields edged higher after a safety move into Treasurys during the sell-off, with the 10-year US Treasury yield trading around 4.98%. Consumer sentiment fell to a five-month low in October, while regular gas rose to $4.29 a gallon and the 30-year fixed mortgage rate stood at 7.32% last week. Investors are now looking to mega-cap tech earnings and the Fed’s next rate decision, with the central bank expected to hold rates steady and December rate-hike odds still elevated at about 71%.