The S&P 500 hit its lowest point this year on Friday, dragged down by rising tensions in the Middle East that sent oil prices soaring once again. Investors seem nervous about more ups and downs as the conflict in Iran keeps shaking up the markets.

Markets Turn Sour on Geopolitical Fears

The S&P 500 dropped 0.61% on Friday, marking its third straight weekly loss and hitting a fresh 2026 low. The index now sits about 5% below its recent peak, signaling a shift in investor sentiment as worries over the Iran conflict deepen.

The tech-heavy Nasdaq fared worse, slipping 0.93%, while the Dow Jones Industrial Average fell 119 points, or 0.25%. For the week, the Dow is on track for a 1.9% decline, and the Nasdaq has dropped 1.3%. The S&P 500’s weekly slide of roughly 1.5% is its first three-week losing streak in nearly a year.

Oil Prices Climb on Conflict Concerns

Meanwhile, oil prices extended their rally amid fears that the Iran war could disrupt global supply chains. West Texas Intermediate crude finished 3.11% higher at $98.71 a barrel. Brent crude settled at $103.14 a barrel, up 2.67%, after piercing the $100 mark for the first time since August 2022 just the day before.

Energy markets are on edge because a wider conflict could squeeze supplies. The jump in oil raises costs for transportation and manufacturing, which can ripple through the economy and weigh on corporate profits, further pressuring stocks.

Investor Caution Amid Uncertainty

Traders are carefully watching developments in the Middle East, uncertain how the war might escalate or resolve.

Sanctions, supply chain hiccups, and rising energy costs have made the market more fragile.

So far, the market shows a mix of worry and waiting. Stocks falling means investors are pulling back on risk, and the jump in oil prices points to ongoing economic worries.

Inflation worries are still hanging around, adding to the unease. Higher fuel prices often filter into broader consumer costs, potentially complicating the Federal Reserve’s policy decisions this year.

Since the Iran conflict shows no sign of ending, market swings and high oil prices might stick around, keeping investors cautious about what it means for the US economy and company profits.