On Friday, the S&P 500 Index closed down 1.51%, the Dow Jones Industrial Average fell 0.96%, and the Nasdaq 100 Index dropped 1.88%, marking a decline to 6.25-month lows. This plunge was attributed to concerns about elevated energy costs stemming from the ongoing war with Iran, which is impacting inflation and economic growth.
As of March 17, the conflict has entered its twenty-first day, with Iran’s actions disrupting approximately 7.5% of global oil supply, as reported by the International Energy Agency. Crude oil prices are high, with Goldman Sachs warning they could exceed $150 per barrel if shipping through the Strait of Hormuz remains affected. Additionally, inflation fears led the 10-year U.S. T-note yield to rise to a 7.5-month high of 4.39%.
Significant stock declines were seen across various sectors, including technology, airlines, and home builders, with major companies like Nvidia and Tesla down over 3%. The markets are currently pricing in a 12% chance of a 25 basis points rate hike at the Federal Reserve’s meeting on April 28-29.
