Key facts
- Oil prices fell Friday but are set for weekly gains due to Middle East conflict.
- Major stock indexes finished mixed, with the Nasdaq lagging due to tech stock losses.
- Brent crude fell 3.9% to $96.78, after briefly surpassing $100.
- New U.S. tariffs and rising energy prices raise concerns about inflation.
- The Federal Reserve is monitoring inflation ahead of its upcoming meeting.
- Investors are concerned about the impact of higher energy costs and tariffs on corporate profits.
Stocks on Wall Street finished mixed on Friday as oil prices declined for the first time in a week, though they remained on track for a weekly gain amid Middle East tensions and supply concerns. The S&P 500 index saw a minimal increase, while the Dow Jones Industrial Average rose, and the Nasdaq Composite experienced losses, largely due to significant drops in major technology stocks.
Heavy fighting in the Middle East throughout the week raised concerns about potential disruptions to global oil and gas flows. Analysts noted that the energy market's resilience is lower than earlier in the year, with weakened strategic reserves. Brent crude, the international benchmark, fell 3.9% to $96.78, after trading above $100 on Thursday. Bond yields also eased, with the 10-year Treasury yield falling to 4.68%.
Investors are also contending with new tariffs imposed by the Trump administration, which could contribute to higher inflation. This, coupled with rising energy prices, is squeezing consumers and influencing the Federal Reserve's interest rate policy. The Fed is expected to monitor inflation closely at its upcoming meeting, with market participants anticipating a potential rate hike by year-end.
Concerns about the sustainability of corporate profits are also weighing on the market. American Express shares fell despite reporting a profit increase, and companies heavily invested in AI technology, such as Alphabet and Nvidia, are facing investor scrutiny regarding the justification of their high valuations.