Traders work on the floor of the New York Stock Exchange during morning trading on March 18, 2026 in New York City.
Michael M. Santiago | Getty Images
Stocks sold off on Friday, with declines intensifying into the final hour of the session as traders grappled with escalating conflict in the Middle East and higher oil prices.
The Dow Jones Industrial Average shed 630 points, or 1.4%. The S&P 500 fell 2%, while the Nasdaq Composite lost 2.6%. The Dow, the Nasdaq and the small-cap Russell 2000 all slipped into correction territory — that is, a 10% decline from their latest high
The moves come after Iran and Israel exchanged strikes overnight, while the former also launched new attacks against energy sites in the Persian Gulf region. The Wall Street Journal reported, citing U.S. officials, that the Pentagon is sending thousands of additional Marines to the Middle East.
The selling ramped up in the afternoon, after Reuters reported that Iraq has declared force majeure on all oilfields operated by foreign companies.
“If this is an escalation involving troops on the ground, then we’re probably in for at least a couple more weeks of this sort of market of higher oil prices, high gas prices; you’re hanging on every headline about energy infrastructure in the region,” Baird investment strategist Ross Mayfield said to CNBC. “Quite frankly, equity markets haven’t sold off in a way that would reflect this sort of event yet, so there could still be some some downside ahead.”
Crude prices closed higher on the day, with West Texas Intermediate futures climbing more than 2% to $98.32 and Brent futures advancing 3.3% to $112.19 for their highest close since July 2022. Prices continued their ascent post settle, with WTI last up nearly 3% and Brent roughly 3.6% higher.
SPX since U.S.-Iran war began
Deutsche Bank’s Jim Reid said Friday marks the 15th trading day of the conflict so far.
“That is on average when we bottom out in U.S. equities after a geopolitical shock,” he said. “However, it would be hard to trade on the back of averages at the moment with so much uncertainty, so headlines will be more important than history here, but if you’re looking for optimism the normal geopolitical playbook would at least give you hope. So far we haven’t deviated from it.”
The stock market could face additional volatility Friday due to the so-called quadruple witching event — the quarterly expiration of stock options, index options, index futures and single-stock futures that occurs four times a year. As trillions of dollars in derivatives roll off the board, the event tends to lead to heavier trading volumes and sharper intraday swings thanks to investors rebalancing or unwinding positions.
Meanwhile, fears that inflation is reigniting and that rate cuts from the Federal Reserve are off the table pushed Treasury yields higher on Friday, further contributing to the day’s weakness.
4-week losing streak
The major averages are on pace to post their fourth losing week in a row. The S&P 500 and Dow are down 0.9% and 1.5% in that time, while the Nasdaq has lost 0.8%.
Both the Dow and Nasdaq are also nearing correction territory. The Dow is 8.6% below its record close set Feb. 10, and the Nasdaq sits more than 8% away from its all-time closing high reached Oct. 29.
Still, with the S&P 500 holding around 5% off its all-time high, Unlimited CEO Bob Elliott said he thinks the market is still too optimistic about the impact the war could have on earnings and the economy.
“When you look at stocks compared to bonds, the markets are pricing in stronger growth since the beginning of this conflict. That doesn’t make any sense,” he told CNBC’s “Closing Bell: Overtime” in an interview. “Households basically getting something like 1% to 2% of real purchasing power taken away from them, even if this conflict resolves tomorrow.”
— CNBC’s Sean Conlon and Yun Li contributed reporting.