The US stock market is facing a sharp decline from its record high on Friday, joining a decline in stocks around the world in the wake of higher oil prices. The S&P 500 fell 1.1% from the all-time high set the previous day.
As of 9:35 a.m. Eastern time, the Dow Jones Industrial Average fell 408 points, or 0.8%. Meanwhile, rising oil prices are adding pressure after pushing inflation higher than expected.
As the war with Iran continues, the Strait of Hormuz is blocked to oil tankers, cutting global supply and sending crude prices rising. For those who don’t know, the price of a barrel of Brent crude oil rose 2.1% to $107.97, up from pre-war levels of about $70.
The stress was most evident in the bond market on Friday, where Treasury yields jumped sharply. The yield on the 10-year Treasury rose to 4.56% from 4.47% late Thursday.
This represents a significant yield swing for the bond market, well above the 3.97% level seen before the war. Regarding the situation, traders have given up all hope that the Fed will cut interest rates this year.
Jacobsen, chief economic strategist at Annex Wealth Management, said: “The strong corporate profits and durable US economy that drove US stocks to records remain intact, but the path is unlikely to be easy.”
South Korea’s Kospi fell 6.1%, one of the market movers. The index has been breaking records this year due to a huge surge in AI stakeholders like SK Hynix.
On Friday, it quickly reversed course after breaching the 8,000 level for the first time in a while.
According to Jonathan Krinsky, chief markets technician at BTIG, “If nothing else this should be a shot at how volatility works both ways.”
