Stocks fell deeper on Friday as oil prices continued to spike and outlooks dimmed as the United States-Israeli war on Iran shows signs of escalation.
The Dow Jones Industrial Average (NYSE: DIA) dropped over 100 points to settle at 46,558.47, while the S&P 500 Index (NYSE: SPY) lost 0.6% to close at 6,632.19 and the Nasdaq Composite (NASDAQ: QQQ) declined 0.9% to end the session at 22,105.35. The S&P 500 posted a new low for 2026 on Friday, ultimately falling 1.6% for the week. The Dow also lost about 2% and the Nasdaq fell 1.3% week to date.
All three major averages were pressured by the continuous rise in oil prices on Friday, with the West Texas Intermediate and Brent crude futures each settling about 3% higher to close at $98.71 and 103.14, respectively. Brent, an international crude benchmark, closed above $100 for the first time since August 2022 on Thursday.
Market participants are growing more concerned that a prolonged increase in oil prices could lead to a period of stagflation, representing high inflation with low economic growth.
On the economic front, job openings rose in January, topping expectations as private sector hiring increased, the Bureau of Labor Statistics reported Friday. The Job Openings and Labor Turnover Survey (JOLTS) showed openings rose by 4.2% to 6.9 million, increasing 396,000 from the previous month as hires grew by 3.3% to 5.3 million.
Elsewhere, consumer sentiment was pressured in early March by the attacks on Iran by the United States and Israel in late February, according to the University of Michigan's preliminary survey on the month. The headline reading came in at 55.5, dipping 1.9% from February's final print. Regarding inflation, the one-year outlook was unchanged at 3.4%, while the five-year reading came in at 3.2%.
"Interviews completed prior to the military action in Iran showed an improvement in sentiment form the last month, but lower readings seen during the nine days thereafter completely erased those initial gains," said Joanne Hsu, director of the Surveys of Consumers, in a statement.
"Gasoline prices have exerted the most immediate impact felt by consumers, though the magnitude of passthrough to other prices remains highly uncertain," Hsu added, stating that consumers "across incomes, age, and political affiliation" reported lower expectations for their personal finances.