U.S. equities fell to their lowest level since November on Friday as surging energy prices from the ongoing Middle East conflict deepened stagflation fears, with the S&P 500 shedding nearly 1% and the 10-year Treasury yield climbing to its highest point since July 2025.
In an official statement, Iran reiterated its hardline stance on the Strait of Hormuz, saying it will not engage in any discussions while under attack.
WTI crude surged past $97 per barrel, while Brent hit $110, up 50% since the start of the war, as energy infrastructure attacks headlined by the strike on Qatar’s South Pars LNG field and Kuwait’s key refineries continued to rattle traders.
The 10-year Treasury yield responded by jumping 12 basis points to 4.38%, its highest since July 2025. The 2-year note rose 9 bps to 3.89%, and the 30-year yield climbed to 4.95%.
Interest-rate markets now price in a roughly 50% probability of a Federal Reserve rate hike by October.
Across U.S. equity markets by midday Friday, losses were broad-based, with all major benchmarks trading lower and volatility rising.
The S&P 500 fell 0.8% to 6,554 points, hovering near four-month lows. The Dow Jones Industrial Average slipped 165 points, or 0.4%, to 45,855.
The Nasdaq 100 dropped 1% to 24,100 while the small-cap Russell 2000 underperformed, down 1.35% to 2,460.
Meanwhile, the CBOE Volatility Index (VIX) jumped 5.8% to 25.46, signaling a pickup in market stress.
Precious metals sold off sharply — gold – as tracked by the SPDR Gold Shared
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