US stock markets ended losses on Friday as oil prices continued to rise and investors monitored developments in the conflict with Iran. The S&P 500 fell 0.61% to 6,632.19, while the Nasdaq Composite fell 0.93% to 22,105.36. The Dow Jones Industrial Average ended down 119 points, or 0.26 percent, at 46,558.47.
The decline pushed the S&P 500 to a new low for 2026 and extended its losing streak to three weeks. For the week, the Dow fell nearly 2%, the S&P 500 lost 1.6%, and the Nasdaq lost 1.3%.
Oil climbed above US$100 as fears of supply disruptions persisted.
Energy markets were the main driver of volatility. West Texas Intermediate crude rose 3.11 percent to settle at $98.71 a barrel, while Brent crude gained 2.67 percent to settle at $103.14. Brent had already moved above US$100 per barrel for the first time since August 2022 in the previous session.
Oil prices have risen amid fears of supply disruptions following the closure of the Strait of Hormuz, a key global shipping route.
Investors are increasingly concerned that sustained energy prices could slow global growth while raising inflation, raising the risk of a deflationary environment.
Changes in interest rate expectations
The rise in oil prices has also affected expectations of monetary policy. Some traders have begun to downplay expectations of a U.S. interest rate cut this year as higher energy prices threaten to push up inflation.
Australian Market Outlook
Australian shares are expected to open lower on Monday as global markets react to continued increases in oil prices. ASX 200 futures indicated a fall of 61 points, or 0.7%, to 8,547.
The local market has already fallen more than 6% since the dispute escalated two weeks ago, shedding more than $190 billion in market value.
Higher oil prices are also expected to increase inflation in Australia. The Treasury has warned that headline inflation could rise to the mid-to-high four percent range this year, raising the prospect that the Reserve Bank will raise the cash rate again at its next meeting.
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