Stocks, bonds and gold slump while Iran war rages
By John Towfighi, CNN
New York (CNN) — US stocks and bonds fell, oil prices rose and gold had its worst week in four decades as the Iran war continues to ripple through financial markets.
The Russell 2000 index was down 2.7% Friday and set to close in correction territory, down more than 10% from its January peak. A “correction” is a Wall Street term for when a stock or index falls 10% or more from its most recent peak.
The Dow fell 447 points, or 0.97%. The S&P 500 fell 1.51%, and the tech-heavy Nasdaq slumped 2.01%.
The war with Iran is sending energy prices soaring, raising concerns about inflation and complicating the outlook for central banks across the globe. Uncertainty about the duration of the conflict, and the prospect of higher-for-longer interest rates to combat inflation, are dimming the outlook for stocks.
US Treasury yields jumped Friday as investors sold bonds and recalibrated expectations for inflation. The 10-year yield, which influences mortgage rates, jumped to 4.39%, its highest level since July.
Stocks took a step lower Friday afternoon after CBS reported the Trump administration is making preparations for a potential deployment of US troops to Iran. Higher bond yields can also pull investors away from stocks.
Brent crude, the global oil benchmark, rose 3.26% Friday to settle at $112.19 per barrel, its highest settle so far during the war and its highest closing price since July 2022.
“The stock market remains in negative territory for the year, and has made new 2026 lows this week, which suggests that the market may not have yet found its bottom and is still in the process of sorting out and pricing in the duration of the Middle East conflict and oil price outlook,” David Laut, chief investment officer at Kerux Financial, said in an email.
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