The S&P 500 fell 0.61% on Friday, closing at 6,632.19, while the Nasdaq dropped 0.93% to 22,105.36 and the Dow lost 0.26%. The broad market index hit a new low for 2026 and posted a 1.6% loss for the week, marking its first three-week losing streak in about a year.
Oil prices continued their surge, with West Texas Intermediate crude futures rising 3.11% to $98.71 per barrel. The ongoing U.S.-Israel war with Iran has disrupted global energy markets and raised fears of 1970s-style stagflation. The conflict has effectively closed the Strait of Hormuz, through which one-fifth of the world's oil travels, with Iran's new supreme leader Mojtaba Khamenei vowing to keep blocking the vital channel.
Consumer sentiment remained subdued in March, with the University of Michigan survey posting a reading of 55.5, down 1.9% from February. Survey Director Joanne Hsu noted that interviews completed before military action in Iran showed improvement, but "lower readings seen during the nine days thereafter completely erased those initial gains."
During the last three major oil supply shocks in 1990, 2008, and 2022, the S&P 500 declined between 16% and 57% before recovering. However, the U.S. is better positioned to absorb an oil shock than in the past, with domestic production near record highs.
