Wall Street was concerned about growing tensions in the Middle East, and traders flocked to safe havens like gold and Treasuries, which caused US stocks to closes Friday’s trading session substantially lower.
The Dow dropped over 500 points at the day’s lows before falling 475 points, or 1.2%. The Nasdaq Composite dropped 1.6%, while the S&P 500 fell 1.5%. By week’s end, all three major indices were down.
On Friday, oil prices surged due to concerns about escalating regional tensions fueled by the Gaza conflict. The international benchmark for oil, Brent crude futures, fell after reaching its highest point since October and closed at $90.45 a barrel. The US benchmark for petroleum futures, West Texas Intermediate, increased to $85.66 a barrel.
Austan Goolsbee, the president of the Chicago Federal Reserve, called the rising tensions in the Middle East “a wild card” in two respects during a Fox Business interview on Friday.
He is worried about the effect a price surge will have on headline inflation as a whole. Another worry is that since gas prices are a significant input, it might increase production costs throughout the economy.
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