U.S. stocks closed broadly lower on Friday as a surge in Brent oil prices to a six-month high overshadowed a rebound in technology shares.
The Dow Jones Industrial Average fell 652.82 points, or 1.23 percent, to 52,215.16. The Standard and Poor's 500 lost 39.75 points, or 0.52 percent, to 7,623.68. The Nasdaq Composite Index slipped 53.52 points, or 0.21 percent, to 25,955.34.
Energy was the leader among Standard and Poor's 500 sectors as crude prices surged, while communication services lagged, weighed down by steep losses in telecommunications shares. Most other sectors finished lower, though technology managed to bounce back from Thursday's sharpest decline since June. Brent oil prices jumped to their highest levels since the end of April on fears of escalating conflict in the Middle East. Brent crude futures for December delivery settled at 116.72 U.S. dollars a barrel, up 3.14 percent, while West Texas Intermediate crude for December delivery settled at 103.27 dollars a barrel, up 3.82 percent.
Investors feared a renewed outbreak of fighting after reports that the United States and Israel have drawn up plans to strike Iran following the Nov. 3 U.S. midterm elections. Iran's state media reported that vessels were attacked in the Gulf and the Strait of Hormuz, while Washington ordered non-emergency personnel and their families to leave Saudi Arabia.
The U.S. national average gasoline price hit 4.29 dollars a gallon on Friday, according to the American Automobile Association.
On the corporate front, American Express fell 3.68 percent despite reporting record third-quarter revenue of 20.06 billion dollars. The credit-card company raised its full-year adjusted earnings outlook but said it would cut about 5 percent of its global workforce.
Telecommunications shares tumbled on reports that SpaceX is seeking cell-tower sites to build a nationwide wireless carrier, with American Telephone and Telegraph Company and T-Mobile each falling about 8 percent. Chip stocks rebounded, with Micron and AMD shares rising, while Meta Platforms shares ended the week down nearly 1 percent.
On the economic front, Standard and Poor's Global's flash U.S. composite purchasing managers' index slipped to 57.6 in October from a five-year high of 58.4 in September, still firmly in expansion territory, while new orders rose to 58.2, the highest since March 2022. But selling prices rose at the sharpest rate since August 2022 as companies passed on surging energy costs and employment increased at the second-fastest pace in over four years.
Meanwhile, the University of Michigan's U.S. Consumer Sentiment Index held at a five-month low of 48 in October, with one-year inflation expectations hitting 4.7 percent and long-term expectations rising to 3.5 percent.
With the Federal Reserve in its pre-meeting quiet period, traders largely expect policymakers to hold rates steady at their Oct. 27-28 meeting, with CME FedWatch data indicating about a 90 percent probability of no change to the current target range of 3.75 to 4 percent.
U.S. stocks end lower as Brent oil surges to six-month high
