US stocks fell on Friday as selling spread beyond technology shares and oil prices surged amid fears of renewed escalation in the Iran war.
The Dow Jones Industrial Average dropped 652.82 points, or 1.23%, to 52,215.16, while the S&P 500 declined 0.52% to 7,623.68. The Nasdaq Composite slipped 0.21% to 25,955.34.
Selling extended into defensive sectors, with consumer staples, utilities and healthcare stocks all declining. American Express fell more than 3% after announcing plans to cut around 5% of its global workforce, while Caterpillar lost about 2% and Goldman Sachs declined more than 1%.
Technology stocks showed some resilience following Thursday’s sharp sell-off. Micron Technology gained nearly 3%, AMD rose almost 2%, and Microsoft edged higher as investors reassessed the sector following recent concerns about debt-funded artificial intelligence infrastructure.
However, uncertainty surrounding the sustainability of AI investment continued to weigh on sentiment, with investors increasingly focused on borrowing costs and whether companies can generate sufficient returns from substantial capital expenditure.
US Treasury yields also moved higher, with the benchmark 10-year yield rising more than four basis points to around 4.999%, reversing some of Thursday’s decline.
Oil prices jumped amid concerns about renewed US and Israeli strikes against Iran and attacks on Saudi Arabian energy infrastructure. West Texas Intermediate crude surged 3.8% to US$103.27 a barrel, while Brent gained 3.1% to US$116.72, its highest settlement since April.
For the week, the S&P 500 lost 0.5% and the Nasdaq declined 0.7%, while the Dow gained 0.4%.
Australian Market Outlook
Australian shares are set to open lower, with S&P/ASX 200 futures down 43 points, or 0.5%, to 8,774.
The weaker lead follows another decline on Wall Street, with rising oil prices adding to concerns about inflation and the outlook for global interest rates.
Energy stocks could attract support from higher crude prices, while technology shares may remain under pressure following two weeks of volatility in the AI sector.
Investors face a significant week of economic and corporate developments, including Australian inflation figures, the US Federal Reserve’s interest rate decision and earnings from major US technology companies.
The results and economic data will provide further direction on interest rates, AI investment spending and broader market sentiment.
