Wall Street Heads for Fourth Weekly Loss as Oil Volatility and Rising Yields Weigh on Markets

BY EMMANUEL OGBONNA

U.S. financial markets edged lower on Friday, leaving Wall Street on course for a fourth consecutive weekly decline as investors continued to grapple with the economic fallout from geopolitical tensions and persistent volatility in energy prices.

The benchmark S&P 500 slipped 0.5% in early trading, putting it on track for its longest losing streak in a year. The Dow Jones Industrial Average fell by 126 points, or 0.3%, while the Nasdaq Composite declined 0.8%, reflecting continued pressure on technology and growth stocks.

Much of the strain on equities is being driven by rising yields in the bond market, which have climbed steadily in recent weeks. Higher yields increase borrowing costs for both companies and consumers, tightening financial conditions and weighing on valuations across asset classes. The yield on the benchmark 10-year U.S. Treasury note rose to 4.32% on Friday, up from 4.25% a day earlier and significantly higher than levels seen before the escalation of conflict involving Iran.

Investors are increasingly concerned that sustained increases in oil and natural gas prices could feed into broader inflation, complicating the outlook for monetary policy. As a result, expectations for interest rate cuts have been sharply scaled back. Data from CME Group show that traders have largely abandoned earlier bets that the Federal Reserve would deliver multiple rate cuts this year, with some market participants now even pricing in a small possibility of rate hikes in 2026—an outcome that would have been considered highly unlikely just weeks ago.

Lower interest rates are typically supportive of economic growth and equity markets, a point frequently emphasized by President Donald Trump, who has publicly called for looser monetary policy. However, central bankers remain wary of easing too soon, given the risk that inflationary pressures—particularly those linked to energy costs—could intensify.

Despite the overall downward trend in U.S. equities, a modest pullback in oil prices on Friday provided some relief to global markets. The price of Brent crude, the international standard, dipped 0.3% to $108.29 per barrel, while West Texas Intermediate hovered near $95.53.

Energy markets have experienced sharp swings in recent weeks, with prices surging from around $70 per barrel prior to the outbreak of hostilities. The volatility reflects uncertainty over the duration of the conflict and its potential impact on oil and gas production, particularly in the strategically vital Strait of Hormuz. Roughly one-fifth of the world’s oil supply typically passes through the narrow waterway, and any disruption there has immediate global repercussions.

International markets showed tentative signs of stabilization after sharp losses earlier in the week. Major European indexes edged higher, while stocks in South Korea rose modestly. In contrast, markets in China continued to decline, reflecting regional economic concerns and sensitivity to global trade dynamics.

On the corporate front, shares of Super Micro Computer plunged 28.2%, making it one of the biggest drags on the broader market. The sharp drop followed allegations by the Federal Bureau of Investigation that a senior executive and others linked to the company were involved in a scheme to illegally export advanced computer servers containing high-end chips produced by Nvidia to China.

The company said it is cooperating fully with investigators and emphasized that it is not named as a defendant in the case. It has placed the employees in question on administrative leave and severed ties with an outside contractor implicated in the allegations.

In contrast, FedEx provided a rare bright spot for investors, with its shares rising 2.8% after reporting quarterly profits that exceeded analysts’ expectations. The results offered some reassurance about the resilience of certain sectors despite broader economic headwinds.

As the trading week draws to a close, markets remain highly sensitive to developments in energy prices, geopolitical tensions, and central bank policy expectations. With uncertainty still elevated, investors are bracing for continued volatility in the weeks ahead as global economic conditions evolve.