WASHINGTON (dpa-AFX) - Extending the slump seen over the two previous sessions, stocks moved sharply lower during trading on Friday. With the extended nosedive, the Nasdaq and the S&P 500 plunged to their lowest closing levels in over six months.
The Dow and the Nasdaq dipped into contraction territory, reflecting a 10 percent plunge from their latest highs, before regaining some ground going into the end the day.
The tech-heavy Nasdaq led the way lower, plummeting 443.08 points or 2.0 percent to 21,647.61, while the S&P 500 tumbled 100.01 points or 1.5 percent to 6,506.48 and the Dow slumped 443.96 points or 1.0 percent to 45,577.47.
The major averages more than offset the strength early in the week, with the S&P 500 diving by 1.9 percent for the week and the Dow and the Nasdaq both plunging by 2.1 percent.
The sell-off on Wall Street came amid continued volatility by the price of crude oil, which has been a key driver of trading in recent sessions.
The price of crude oil for May delivery has shown wild swings over the course of the session but is currently spiking by nearly 3 percent in electronic trading.
Crude oil prices initially surged amid news of new attacks on energy infrastructure in the Middle East but gave back ground amid reports suggesting the U.S. is weighing lifting sanctions on some Iranian oil to increase supply and bring down prices.
However, the surge resumed due in part to comments from President Donald Trump, who suggested in an interview with MS Now's Stephanie Ruhle that the U.S. would continue to attack Iran until they can 'never rebuild.'
Trump later told reporters he is not interest in a ceasefire with Iran, saying, 'You don't do a ceasefire when you're literally obliterating the other side.'
While oil prices have been on a rollercoaster rise in recent sessions, they remain sharply higher compared to when the war began, fueling concerns about the outlook for inflation and interest rates.
CME Group's FedWatch Tool currently indicates the Federal Reserve is not likely to cut interest rates this year and there's a chance rates could even be higher by the end of the year.
Sector News
Computer hardware stocks turned in some of the worst performances on the day, with the NYSE Arca Computer Hardware Index diving by 6.0 percent after ending the previous session as a record closing high.
Super Micro Computer (SMCI) led the sector lower, plummeting by 33.3 percent after U.S. prosecutors charged several of the information technology company's employees with smuggling Nvidia (NVDA) chips to China.
Substantial weakness was also visible among networking stocks, as reflected by the 4.6 plunge by the NYSE Arca Networking Index. The index also ended Thursday's trading at a record closing high.
Interest rate-sensitive utilities stocks also saw considerable weakness, dragging the Dow Jones Utility Average down by 3.7 percent to its lowest closing level in over a month.
Gold, commercial real estate and airline stocks also showed significant moves to the downside amid broad based selling pressure on Wall Street.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday, with the Japanese markets closed for a holiday. China's Shanghai Composite Index slumped by 1.2 percent, while Hong Kong's Hang Seng Index slid by 0.9 percent.
The major European markets also showed significant moves to the downside on the day. The German DAX Index dove by 2.0 percent, the French CAC 40 Index plunged by 1.8 percent and the U.K.'s FTSE 100 Index tumbled by 1.4 percent.
In the bond market, treasuries moved sharply lower, extending the downward move seen over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, soared 11.0 basis points to a nearly eight-month closing high of 4.391 percent.
Looking Ahead
Next week's trading will likely continue to be driven by developments in the Middle East war and the impact on crude oil prices.
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