The S&P 500 fell to 6,557.94, down 0.73% as of mid-morning Friday, with all three major indexes on pace for a fourth consecutive losing week as surging oil prices and Middle East conflict weighed on sentiment. Brent crude is trading at $108.6 a barrel after spiking as high as $119 earlier in the week, with Iranian strikes on Gulf energy infrastructure keeping supply fears front and center. SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down 1.11% on the day, extending a 3.24% year-to-date loss.
The Energy Shock Driving the Selloff
A geopolitical energy crisis has accelerated sharply in recent weeks. Iranian strikes on LNG facilities in Qatar significantly reduced the country’s export capacity. The Strait of Hormuz is also disrupted, and the Pentagon is deploying an additional 2,200 to 2,500 Marines to the region, leaving markets with no near-term path to de-escalation.
WTI crude sits at $95.77 after reaching a one-year high of $98.48 on March 13. The monthly surge in WTI is 48% from mid-February levels, one of the fastest oil price accelerations in recent memory.
Treasury Secretary Scott Bessent announced the U.S. is considering removing sanctions on Iranian oil at sea to free up roughly 140 million barrels, and Israeli Prime Minister Netanyahu agreed to halt strikes on an Iranian gas facility at President Trump’s request. Those efforts have steadied prices somewhat from the week’s highs but haven’t reversed broader market anxiety.
The Biggest Movers Dragging Indexes Down
Super Micro Computer (NASDAQ:SMCI | SMCI Price Prediction) is the S&P 500’s worst performer today, falling on concerns about AI chip sales to China. With CrowdStrike (NASDAQ:CRWD), Western Digital (NASDAQ:WDC), and Nvidia (NASDAQ:NVDA) all under pressure. The tech-heavy Invesco QQQ Trust (NASDAQ:QQQ) is down 1.13% on the day, slightly worse than the S&P 500.
The Dow is holding up better. The SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) is down 0.72%, cushioned by energy gainers. Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM) are among the gainers as oil majors benefit directly from elevated crude prices.
The Russell 2000, tracked by the iShares Russell 2000 ETF (NYSEARCA:IWM), is down 1.37%, the worst performer among major indexes today, as small-caps face a double hit from energy cost pressures and tighter financial conditions.
Fear Gauge and Bond Market Context
The VIX sits at 24.06, placing it in the elevated uncertainty range. That’s down from a recent peak of 29.49 on March 6 but remains well above December’s calm readings. The 10-year Treasury yield has climbed to 4.26%, up from 3.97% just three weeks ago. Rising yields alongside an equity selloff and triple-digit oil prices is a stagflation signal: higher costs, tighter credit, and slower growth converging at once.
Consumer sentiment was already fragile heading into this shock. The University of Michigan’s index stood at 56.4 in January, deep in recessionary territory, before the current oil surge. Pump prices feeding through from $100-plus crude will pressure that reading further in coming months.
What to Watch Going Into Next Week
The key variable is whether diplomatic efforts to free Iranian oil supply gain traction. Any credible progress on sanctions relief or a ceasefire around Gulf energy infrastructure could bring Brent back below $100, which would remove a key source of current market pressure. The S&P 500 year-to-date loss, now sitting at 3.24% loss since January 1, will be a closely watched data point heading into next week. Boeing’s ongoing litigation and the semiconductor sector’s sensitivity to risk-off moves are additional pressure points heading into next week’s trading.
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