New york: U.S. stock markets moved lower on Friday, heading toward a fourth straight week of losses, although a slight drop in oil prices helped calm markets in other parts of the world. The S and P 500 fell 0.5% in early trading and was on track for its longest weekly losing streak in a year. The Dow Jones Industrial Average dropped 126 points, or 0.3%, while the Nasdaq Composite declined 0.8%.
According to United News of Bangladesh, rising bond yields continued to exert pressure on U.S. stocks. Higher yields increase borrowing costs for businesses and consumers, potentially slowing economic growth and reducing investment demand. Bond yields have been on the rise since the conflict with Iran began, as investors worry that elevated oil and gas prices could lead to increased inflation.
Due to these concerns, traders are now less optimistic about the possibility of the Federal Reserve cutting interest rates this year. Some market data even suggests a slight chance of a rate hike in 2026, a scenario that appeared unlikely before the conflict. While lower interest rates typically support economic growth and stock prices, former President Donald Trump has consistently advocated for rate cuts. However, precipitous rate reductions could exacerbate inflation.
Outside the United States, markets exhibited greater stability following Thursday’s sharp declines. Stock indexes in Europe experienced slight gains, and South Korea’s market rose by 0.3%, although markets in China saw declines. This relative calm was attributed to easing oil prices, with Brent crude slipping 0.3% to $108.29 per barrel, while U.S. benchmark crude remained nearly unchanged at $95.53.
Oil prices have been highly volatile since the onset of the conflict, climbing from around $70 per barrel. Markets are closely monitoring the duration of the conflict and its impact on energy supplies, particularly in the Strait of Hormuz, a critical passage for global oil shipments that Iran has restricted.
In corporate news, Super Micro Computer shares plummeted 28.2% after U.S. authorities accused a senior executive and others of illegally exporting advanced chips to China. The company stated that it is cooperating with investigators and has suspended the employees involved. Conversely, FedEx shares rose 2.8% following the announcement of stronger-than-expected quarterly profits.
In the bond market, the yield on the 10-year U.S. Treasury increased to 4.32%, up from 4.25% a day earlier and significantly higher than the 3.97% level observed prior to the conflict’s onset.