Wall Street indices experienced a turbulent week, with major indices losing ground due to escalating U.S.-Iran tensions and new tariffs from the Trump administration.
The S&P 500 ended the week with a slight gain of 3.68 points to 7,411.98, marking its second consecutive losing week since March. The Dow Jones Industrial Average rose 235.60 points to 51,947.25, while the Nasdaq fell 161.87 points to 24,975.82, impacted by declines in tech stocks like Micron Technology and Broadcom.
The ongoing conflict in the Middle East has raised concerns about disruptions in the global oil supply, with Brent crude falling 3.9% to $96.78. This decline followed a rise earlier in the week, with prices briefly surpassing $100 per barrel. Meanwhile, bond yields eased slightly, with the 10-year Treasury yield dropping to 4.68% from 4.71%.
“If escalation continues and the Strait of Hormuz remains closed, the impact will land on an energy market with far less resilience than in the spring.”
Theodore Bunzel, Head of Geopolitical Advisory at Lazard Asset Management
The U.S. has intensified its trade war by imposing new tariffs, affecting nearly all imports. These tariffs are expected to increase consumer costs and contribute to rising inflation, which has been a significant concern for the Federal Reserve's interest rate policy.
Investors are also worried about the impact on corporate profits, with American Express shares falling 4.3% despite reporting profit growth. Concerns about the sustainability of profits, particularly in AI-focused tech companies, are adding to market volatility.
Background
The recent escalation in U.S.-Iran tensions and the imposition of new tariffs by the Trump administration have compounded existing market pressures, including stubborn inflation and concerns over corporate profitability.
As markets remain volatile, investors will closely monitor geopolitical developments and the Federal Reserve's policy decisions. The potential for further rate hikes and the impact of tariffs on inflation will be key factors influencing market movements in the coming weeks.
