Stocks experienced significant declines on Friday, driven by rising oil prices that heightened inflation expectations and increased the likelihood of an interest rate hike by the end of the year. The three major indexes recorded their fifth consecutive weekly loss, with the Dow Jones Industrial Average joining the tech-heavy Nasdaq Composite in correction territory. By the market’s close, the Dow fell 1.7% to settle at 45,166, while the S&P 500 dropped 1.7% to finish at 6,368, marking their longest losing streaks since May 2022. The Nasdaq Composite, which entered correction territory on Thursday, plummeted 2.2% to 20,948.
Oil prices continued their upward trajectory, with West Texas Intermediate crude futures rising 5.5% to close at $99.64 per barrel, indicating a staggering 48.7% increase month-to-date. The surge in oil prices contributed to growing concerns about inflation, prompting investors to reassess market conditions.
Mark Hackett, the chief market strategist for Nationwide, emphasized that the current market environment is being shaped by heightened uncertainty and volatile reactions rather than fundamental indicators. He noted that while the earnings and broader macroeconomic conditions remain supportive, the lack of resolution regarding geopolitical conflicts and instability in energy markets complicates prospects for a sustained upward movement in stocks.
In the realm of consumer sentiment, rising gas prices are taking a toll. The average price for a gallon of gas in the U.S. has climbed over 33% within the past month, currently standing at $3.978. This increase significantly impacted consumer confidence, reflected in the University of Michigan’s final Consumer Sentiment Index for March, which recorded a 5.8% decline from February. The index indicated that escalating gas prices and unstable financial markets were principal contributors to waning sentiment. Additionally, inflation expectations for the year ahead surged to 3.8%, marking the largest monthly increase since April 2025.
As inflationary pressures mount, futures traders are now pricing in a 22% probability of a Federal Reserve rate hike by December, a notable rise from a month ago when expectations were virtually nonexistent.
The technology sector has been particularly hard-hit, with the State Street Technology Select Sector SPDR ETF down 6.4% so far this month. This downturn continues a broader sell-off since the beginning of the year, with the ETF down almost 10% since December 31. Microsoft, a key holding in this sector, has faced significant losses, declining by over 26% year-to-date. This puts the tech giant on track for its worst quarterly performance since Q4 2008. However, BofA Securities analyst Tal Liani remains optimistic, reinstating coverage with a “Buy” rating and setting a price target of $500, suggesting a potential 40% upside. Liani highlighted Microsoft’s strengths in artificial intelligence and its ability to leverage this technology across its cloud platform and software products, predicting revenue growth of 15% to 17% over the next three years.
Despite the overall downward trend in the stock market, not all companies faced declines. Argan Inc. saw remarkable gains, soaring 37.9% following the release of its better-than-expected fiscal 2026 fourth-quarter earnings and revenue. CEO David Watson emphasized the company’s new contract value of $2.5 billion and its positioning to benefit from trends like the electrification of infrastructure and the growing demand for AI and data centers.
