Stocks closed lower on Friday, concluding a week marked by losses across major indices as investors grappled with concerns over slowing economic growth and persistent inflation. The Dow Jones Industrial Average fell 0.3%, the S&P 500 declined by 0.6%, and the Nasdaq Composite dropped nearly 1%. This marks the third consecutive week of declines for all three major averages.
The outlook for Federal Reserve policy shifted amid renewed inflation worries and rising oil prices, driven largely by escalating tensions in the Middle East. As crude prices increased, traders recalibrated their expectations for potential interest rate cuts this year.
On Friday, West Texas Intermediate (WTI) futures rose 2%, reaching $98 per barrel, while Brent crude futures surpassed $100 once again. The surge in oil prices has reignited fears of inflation, prompting a recalculation of the timeline for possible Fed rate cuts.
Economic data released on Friday offered mixed signals. The Personal Consumption Expenditures (PCE) index indicated that headline prices rose by 0.3% month-over-month in January, while the “core” PCE—which excludes food and energy—remained unchanged with a 0.4% increase. These figures suggest that inflation pressures are still present as the economy adjusts.
Additionally, growth in the U.S. economy slowed more than expected in the fourth quarter of 2025. The Bureau of Economic Analysis reported that real GDP growth for that period was revised down to 0.7%, a significant decrease from the previously estimated 1.4%.
Consumer sentiment also took a hit, with a preliminary reading for March posting the lowest level of the year. This decline corresponds with ongoing concerns regarding the impact of the Middle East conflict on gasoline prices and overall economic confidence.
In labor market news, the Job Openings and Labor Turnover Survey (JOLTS) indicated a modest increase in job openings for February, with the number reaching 6.94 million, surpassing estimates. This data comes amidst contrasting figures for January’s job market, which saw a surprising dip of 92,000 jobs lost when analysts had predicted gains.
Amidst these developments, the Federal Reserve’s preferred measure of inflation has led to speculation about its next policy moves. Currently, traders are pricing in a 99% probability that the Fed will hold interest rates steady at its upcoming meeting, but questions linger regarding how rising oil prices will influence inflation expectations.
Boeing shares saw a slight increase as the company alleviated concerns over potential delivery delays of its Max jets, indicating the delays would not be as severe as initially feared.
Overall, the markets are reacting to heightened risk sentiment, with defensive sectors like utilities and real estate outperforming amid the sell-off in technology stocks. As geopolitical tensions persist and inflation concerns loom, investors remain cautiously evaluating the trajectory of economic indicators and potential shifts in monetary policy.
