U.S. stock indices opened higher but closed lower on Friday, with the S&P 500 index hitting its lowest level of the year and recording its first three-week losing streak in a year. Former President Trump stated that U.S. forces would conduct "intense airstrikes" on Iran next week. For the week, the S&P 500 fell 1.6%, the Nasdaq Composite declined 1.26%, and the Dow Jones Industrial Average dropped 1.98%. The S&P 500 marked its longest weekly losing streak since March 2025.
At market close, the Dow Jones Industrial Average was down 119.38 points, or 0.26%, to finish at 46,558.47. The Nasdaq Composite lost 206.62 points, or 0.93%, closing at 22,105.36. The S&P 500 declined by 40.43 points, or 0.61%, settling at 6,632.19. Several prominent technology stocks weakened, with Adobe falling 7.5%, Meta Platforms dropping 3.8%, and Broadcom declining 4.1%. The Nasdaq Golden Dragon China Index closed up 0.75%.
In European markets, Germany's DAX 30 index fell 128.24 points, or 0.54%, to 23,444.20. Britain's FTSE 100 index dropped 39.73 points, or 0.39%, to 10,265.42. France's CAC 40 index decreased by 72.91 points, or 0.91%, to 7,911.53. The Euro Stoxx 50 index was down 30.79 points, or 0.54%, at 5,718.10. Spain's IBEX 35 index fell 73.58 points, or 0.43%, to 17,066.32. Italy's FTSE MIB index declined by 129.68 points, or 0.29%, closing at 44,326.50.
In Asian markets, Japan's Nikkei 225 index fell 1.16%, South Korea's KOSPI index dropped 1.72%, and Indonesia's Jakarta Composite Index declined 3.05%.
In the cryptocurrency market, Bitcoin rose 1.86% to $71,469.41, while Ethereum gained 2.4% to $2,114.81.
Brent crude futures rose 2.67%, or $2.68, to settle at $103.14 per barrel. WTI crude increased by 3.11%, or $2.98, closing at $98.71 per barrel. Brent crude futures closed above $100 per barrel for a second consecutive session, reaching their highest level in over three years. Meanwhile, as conflict continues to spread in the Middle East, world leaders are grappling with what could be one of the largest shocks in oil market history. Brent settled at $103.14, while U.S. crude futures closed near $99, the highest level since July 2022. Analysts and traders suggest that if Brent remains above the key psychological level of $100 per barrel, the surge in energy costs could increase pressure on the U.S. administration to end the war with Iran. The impact of rising oil prices has already begun to affect consumers in many parts of the world.
The U.S. Dollar Index climbed back above the 100 mark for the first time since last November. Market turmoil has bolstered the dollar's status as a safe-haven asset. The euro traded near its lowest level against the dollar since November 2025, while the yen was at a level that has traders alert for potential intervention by Japanese authorities.
Precious metals declined, with spot gold down 1.2% to $5,018.96 per ounce and spot silver falling 3.89% to settle at $80.57.
On the macroeconomic front, former President Trump stated that U.S. forces will carry out "intense airstrikes" on Iran next week. He declined to comment on whether the U.S. intends to seize Iran's Kharg Island, a key oil export hub. Trump claimed the U.S. does not need Ukraine's anti-drone technology assistance for defense against Iranian drones. Reports had suggested the U.S. was considering seizing Kharg Island as military actions against Iran persist. The island, located in the Persian Gulf, is Iran's largest crude oil export terminal, handling about 90% of the country's petroleum exports. In an interview, Trump refused to answer related questions, stating that seizing Kharg Island is "not a priority." He reiterated that U.S. forces would escort tankers through the Strait of Hormuz if necessary.
The U.S. eased sanctions on Venezuelan oil and fertilizers to alleviate inflationary pressures. Due to rising fertilizer and oil prices stemming from the Iran conflict, the U.S. Treasury simplified procedures for American businesses and farmers to purchase Venezuelan fertilizers and oil on Friday. Disruptions to tanker traffic in the Persian Gulf caused by the Iran conflict have led to a spike in oil and fertilizer prices, potentially fueling inflation and driving up U.S. food costs. Treasury Secretary aims to increase U.S. oil supply and lower prices by reducing sanctions on oil-rich Venezuela. The Office of Foreign Assets Control took separate action, authorizing U.S. businesses and farmers to purchase and import Venezuelan petrochemical products like fertilizers and oil; provide goods, services, or technical support to Venezuela's power and petrochemical sectors; and negotiate new contracts to develop Venezuela's oil and gas supplies or modernize its grid to help boost oil production.
The U.S. Department of Justice will appeal a ruling in the Powell case, potentially delaying the appointment of a successor. After a judge quashed subpoenas issued to the Federal Reserve, a U.S. attorney vowed to continue an investigation into Fed Chair Powell, which could postpone the appointment of his successor, as Powell's term ends in May. A U.S. district judge stated the government failed to provide any evidence to justify the subpoenas, which were related to the renovation of the Fed's headquarters building and Powell's comments on the project. The attorney said the process was arbitrarily disrupted by an activist judge and called the situation a disgrace. A member of the Senate Banking Committee warned he would block any Fed chair nomination until the DOJ's investigation into Powell concludes, calling the investigation baseless and a failed attack on Fed independence, suggesting an appeal would only delay the confirmation process.
U.S. job openings increased and layoffs declined in January, indicating an improvement in labor demand before recent signs of renewed weakness emerged. Data from the Bureau of Labor Statistics showed job openings rose to 6.95 million from December's 6.55 million, exceeding market expectations. The report also included annual revisions that lowered vacancy data for most of 2025. Although January showed slight improvement in job openings, it did not translate into significantly more hiring, consistent with still relatively fragile labor market conditions. Recent data showing a drop in February nonfarm payrolls, a rise in the unemployment rate, and reduced hiring plans among small businesses have shaken previous assessments that the labor market was stabilizing. The increase in job openings was seen across multiple sectors, including finance and insurance, healthcare and social assistance, retail trade, and accommodation and food services.
JPMorgan indicated that risk appetite among U.S. retail investors is cooling. As the Middle East situation escalates and inflation concerns mount, U.S. retail investors are reducing their typically strong support for the stock market. A team led by strategist Arun Jain noted that the weekly equity purchase volume by retail investors has declined by approximately 30%. The team reported that this is the first sign of sustained weakness among retail investors this year, with Monday seeing the largest net selling of individual stocks in the past month, though net buying resumed on Tuesday and Wednesday, it remained below the year's average. Over the five trading days ending Wednesday, overall retail inflows dropped to $6.7 billion, below the 12-month average of $7.1 billion. Inflows into ETFs fell 22% to $6.3 billion.
U.S. consumer spending rose more than expected in January. With core inflation remaining firm and the Middle East war dragging on, economists are increasingly convinced the Federal Reserve will not resume interest rate cuts in the near term. The Bureau of Economic Analysis reported that consumer spending, which accounts for over two-thirds of economic activity, increased 0.4% in January, matching December's gain. The war launched by the U.S. and Israel against Iran has pushed up oil prices, which could impact consumption. The war has also caused stock market volatility, and economists warn that shrinking wealth among high-income households might force some to cut spending. Lower-income households have already reduced spending due to higher goods prices from import tariffs. Economists expect this drag to affect the economy in the second quarter. The Personal Consumption Expenditures (PCE) price index rose 0.3% in January, after a 0.4% increase in December. Over the 12 months through January, PCE inflation was 2.8%, down from 2.9% in December. Excluding volatile food and energy, the core PCE price index increased 0.4%, the same as December's rise. Core PCE was up 3.1% year-over-year, compared to 3.0% in December.
In individual stock news, Tesla CEO Elon Musk has again dismissed multiple founders of xAI, as progress on an AI programming project faces setbacks. Reports indicate Musk initiated a new round of layoffs due to poor performance of xAI's programming product, dismissing several co-founders and deploying personnel from SpaceX and Tesla to review xAI and fire underperforming employees. A core reason cited is poor quality of model training data, with the programming product lagging far behind similar offerings from Anthropic and OpenAI. Two more founders have now left, meaning only two of the original 11 co-founders from 2023 remain. A project lead appointed by Musk also departed after just 16 days. Tesla's AI software head has now taken over the project, and Tesla will collaborate with xAI on joint development. Musk has built a massive data center for xAI and has access to vast data from social platform X, but frequent personnel changes have hurt morale, with many researchers leaving due to demanding work or being poached, creating vacancies so large the company is re-contacting previously rejected candidates, for which Musk has apologized.
Cerebras Systems has partnered with Amazon to offer Cerebras AI chips on Amazon Web Services. Amazon and Cerebras announced an agreement to integrate their computing chips into a new service aimed at accelerating AI services like chatbots and programming tools. Cerebras, a chip startup valued at $23.1 billion that specializes in AI chips not reliant on expensive high-bandwidth memory and competes with Nvidia, signed a $10 billion chip supply deal with OpenAI earlier this year. Under the agreement, Cerebras chips will be deployed in AWS data centers, interconnected with Amazon's custom Trainium3 AI chips via Amazon's custom networking technology, allowing users easy access to Cerebras chips. The financial size of the deal was not disclosed. The collaboration focuses on the AI "inference" phase, splitting tasks into "pre-fill" (handled by Trainium3 chips, converting user requests into AI-readable language) and "decode" (handled by Cerebras chips, outputting the user's requested answer), employing a "divide and conquer" strategy. This approach is similar to a solution analysts expect Nvidia to announce next week, which would involve combining its own GPUs with chips from acquired company Groq.
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