Stocks Fall and Brent Tops $100 as War Heats Up: Markets Wrap
(Bloomberg) — Volatility gripped Wall Street, with stocks falling and oil jumping to an over three-year high as the war in Iran raged on. A rally in bonds waned as higher energy prices stoked inflation angst.
The S&P 500 erased a nearly 1% gain, with the US stepping up strikes on Iran to unprecedented levels as both sides threatened to escalate a conflict hitting its two-week mark. Brent closed above $100. After climbing in the aftermath of sluggish economic data, Treasuries lost steam, with longer-term maturities underperforming. The plunge in a gauge of megacaps from a record topped 10%. The dollar rose to its highest since December.
Traders also monitored developments related to a federal judge’s decision to reject as improper Justice Department subpoenas issued to the Federal Reserve Board seeking records on its headquarters renovations and Jerome Powell’s comments to Congress about that. The US will appeal, said Jeanine Pirro, who leads the US Attorney’s Office for the District of Columbia.
The worst supply disruption in the history of the oil market is showing no signs of abating, offering the global economy little respite from crude prices that have soared since the Iran war began.
Recent comments from President Donald Trump and Iran’s new leader have suggested there will be no letup in the conflict soon. The Pentagon sent a Marine expeditionary unit to the Middle East, the Wall Street Journal reported, citing two US officials. But pressure is building for a de-escalation as oil surges.
“There are two paths at this time for markets and the better outcome is a shorter war,” said Chris Zaccarelli at Northlight Asset Management. “Likewise, if the length of the military conflict stretches out much longer than expected, we could see even more negative impacts on the markets.”
The US issued a second authorization letting countries buy more Russian oil that’s stuck on tankers due to sanctions, part of the White House’s push to prevent prices from surging.
Defense Secretary Pete Hegseth said Friday marked the largest attacks against the Islamic Republic, putting the total number of targets hit by the US-Israeli alliance since the beginning of the war at around 15,000. Iran’s new supreme leader is wounded and likely disfigured, he noted.
“It will likely continue to be a ‘headlines-driven’ market,” said Matt Maley at Miller Tabak. “Investors are starting to worry that the situation in the Middle East could drag on for a long enough period of time for it to have an impact on the economy.”
President Trump signed two executive orders on Friday aimed at making homeownership more affordable, the latest step by the administration to ease cost-of-living concerns as the Iran conflict drives up gas prices and rattles markets.
Market stress is building at the fastest pace since April’s tariff shock, with a Bank of America Corp. index measuring future price swings implied by options markets in equities, rates, currencies and commodities jumping to 0.79, not far from the 0.89 peak it reached during the Liberation Day turmoil.
The spike in oil prices and growing concerns around private credit are causing market activity to resemble the lead-up to the global financial crisis, according to Bank of America’s Michael Hartnett.
Traders also kept a close eye on a slew of economic reports. Consumer spending barely rose in January after gross domestic product was weaker than previously reported at the end of last year, suggesting the economy lost some momentum before the war.
Job openings rose and layoffs fell, signaling demand for workers was improving before the labor market showed signs of weakness. The core personal consumption expenditures price index — the Fed’s preferred inflation gauge — matched estimates. Consumer sentiment hit a three-month low.
Fed officials are widely expected to hold rates steady next week, and investors will focus on any potential change in the central bank’s outlook amid the war.
Underlying inflation pressures will continue to boil under the surface, impacted by the conflict, according to Jeffrey Roach at LPL Financial.
“We expect the Fed to highlight the uncertainty on both sides of the mandate,” he added. “Inflation will be impacted by the war and unemployment will be impacted by the disruptions in the labor market. Expect to see some important revisions in the upcoming Summary of Economic Projections next week.”
Corporate Highlights:
Charles Schwab Corp. expects revenue growth of around 16% for the first quarter as retail investors remain engaged despite uncertainty about the direction of the economy and the war. Boeing Co. is repairing damaged wiring in as many as 25 undelivered 737 Max jets, disrupting near-term deliveries of the aircraft, people familiar with the matter said. Apple Inc. is lowering the fees it collects from app developers in China, a major concession in a hugely lucrative market where the company faced the risk of antitrust intervention by local regulators. Adobe Inc. slipped as Chief Executive Officer Shantanu Narayen will resign from his position atop the creative software giant amid deep skepticism about the company’s ability to thrive in the AI era. Carvana Co.’s board approved a 5-for-1 stock split, a move to bring down the automotive retailer’s lofty share price following a staggering multiyear rally from the depths of the pandemic. Ulta Beauty Inc. sank after the cosmetics retailer offered guidance for the current year that was toward the low end of Wall Street’s expectations. What Bloomberg Strategists say…
“Stocks have recently shifted into a ‘good-data-is-bad-news’ regime, not because they’re reacting to the economic news necessarily, but instead because they’re anticipating a worsening ahead.”
—Tatiana Darie, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.6% as of 4 p.m. New York time The Nasdaq 100 fell 0.6% The Dow Jones Industrial Average fell 0.3% Currencies
The Bloomberg Dollar Spot Index rose 0.6% The euro fell 0.8% to $1.1422 The British pound fell 0.9% to $1.3227 The Japanese yen fell 0.2% to 159.68 per dollar Cryptocurrencies
Bitcoin rose 1.4% to $71,173.77 Ether rose 1.9% to $2,101.9 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.28% Germany’s 10-year yield advanced three basis points to 2.98% Britain’s 10-year yield advanced five basis points to 4.82% Commodities
West Texas Intermediate crude rose 2.7% to $98.28 a barrel Spot gold fell 1.2% to $5,018.56 an ounce ©2026 Bloomberg L.P.
