By Stephen Culp and Johann M Cherian
NEW YORK, March 13 (Reuters) – U.S. stocks ended down on Friday, capping a week in which erratic crude oil prices whipsawed equities, as investors gauged how the war in Iran was affecting the global oil supply.
All three major U.S. stock indexes logged daily and weekly declines.
The small-cap Russell 2000 ended at its lowest close of the year so far.
Crude prices fluctuated before heading higher, even after U.S. President Donald Trump temporarily eased sanctions on Russian oil to assuage supply concerns.
“We’ve seen volatility in the energy market that rivals any two-week period in cryptocurrency history. So, it’s hard to say that it’s being driven by fundamentals,” said Paul Nolte, senior wealth advisor & market strategist at Murphy & Sylvest in Elmhurst, Illinois. “It’s very much an emotional market, so it really doesn’t make sense trying to trade, let alone invest in this market.”
Nolte added: “You just sit back and wait for things to unfold and to settle, and that may happen over the course of a couple of weeks.”
Front-month WTI crude futures settled at $98.71 per barrel, up 3.11% on the day. Brent rose 2.67% to $103.14, settling above $100 per barrel for the first time since August 2022.
Trump’s vow to hit Iran “very hard over the next week,” combined with reports that the conflict had spread to Lebanon, Kuwait, Iraq, the United Arab Emirates, Bahrain and Oman, has dimmed hopes of de-escalation and near-term resolution.
Trump’s comments prompted Iran to tighten its grip on the Strait of Hormuz, conduit for one-fifth of the world’s oil. On Thursday, the International Energy Agency said the war will cause the largest-ever disruption in global crude supply.
The Commerce Department’s sharp downward revision to fourth-quarter GDP growth dominated a deluge of mostly disappointing economic indicators. The Personal Consumption Expenditures report showed little movement in the U.S. Federal Reserve’s preferred inflation gauge, while other data showed weakening demand for durable goods.
Despite softer economic data, the U.S. Federal Reserve was expected to leave its key interest rate unchanged at the conclusion of next week’s monetary policy meeting. With the threat of spiking oil prices further stoking inflation, the odds of a near-term rate cut are dwindling.
“Inflation remains elevated, and with the possibility of energy prices eventually moving into the pipeline, the Fed is likely to stay on hold for a longer period of time,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
The Dow Jones Industrial Average fell 119.38 points, or 0.26%, to 46,558.47, the S&P 500 lost 40.43 points, or 0.61%, to 6,632.19 and the Nasdaq Composite lost 206.62 points, or 0.93%, to 22,105.36.
Among the 11 major sectors of the S&P 500, technology shares posted the biggest percentage loss. Utilities enjoyed the largest percentage gain.
Amid mounting concerns over credit quality, the S&P 500 financial sector fell 3.4% on the week.
Design software maker Adobe <ADBE.O> dropped 7.6% after it was announced that longtime CEO Shantanu Narayen will leave his role once a successor is appointed, renewing worries over potential AI disruption.
Meta Platforms <META.O> slid 3.8% following a report that the social media behemoth has postponed the release of its artificial intelligence model “Avocado” to at least May.
Declining issues outnumbered advancers by a 1.9-to-1 ratio on the NYSE. There were 71 new highs and 185 new lows on the NYSE.
On the Nasdaq, 1,714 stocks rose and 2,966 fell as declining issues outnumbered advancers by a 1.73-to-1 ratio.
The S&P 500 posted 13 new 52-week highs and 11 new lows while the Nasdaq Composite recorded 33 new highs and 193 new lows.
Volume on U.S. exchanges was 18.12 billion shares, compared with the 19.84 billion average for the full session over the last 20 trading days.
(Reporting by Johann M Cherian, Utkarsh Hathi in Bengaluru, Stephen Culp in New York; Editing by Maju Samuel, Devika Syamnath and David Gregorio)
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