Oil Surge Triggers Market Rout as Tech Stocks Plunge

The US stock market suffered its sharpest decline in recent weeks on Friday as higher oil prices fueled concerns across global markets, with the S&P 500 falling 1.2 percent from the record it had set just the day before. The Dow Jones Industrial Average dropped 537 points to 49,526.17, while the Nasdaq composite sank 410 points to 26,225.14 as technology stocks that had led markets to record highs over the past year bore the brunt of the sell-off. Nvidia, the semiconductor giant that has become synonymous with the artificial intelligence boom, fell 4.4 percent, while Micron Technology dropped 6.6 percent. Oil prices have surged to their highest levels since before the ongoing conflict with Iran, with Brent crude settling at $109.26 per barrel on Friday, up 3.3 percent and more than 55 percent above the roughly $70 price seen before the war. The Strait of Hormuz, through which roughly a fifth of the world's oil flows, remains closed to tankers, and President Donald Trump warned Iran on Sunday that "there won't be anything left" if negotiations do not progress. Rising energy costs have driven Treasury yields sharply higher, with the 10-year yield climbing to 4.59 percent and the 30-year reaching 5.13 percent, levels not seen since 2007. Higher yields make borrowing more expensive for households and businesses, weighing on both the economy and stock prices, and traders have abandoned expectations that the Federal Reserve will cut interest rates this year, with some now betting on rate hikes in 2026. The Australian sharemarket is expected to follow Wall Street lower on Monday, with ASX 200 futures pointing to a 0.4 percent drop at the open, while the Australian dollar traded at 71.50 US cents. The broader sell-off spread internationally, with European and Asian markets falling more than 1.5 percent, and South Korea's Kospi dropping 6.1 percent. Analysts at Annex Wealth Management described the markets as "overbought territory" and called for discipline, while BTIG's chief market technician warned that the volatility "works both ways." G7 finance ministers are set to meet in Paris on Monday with the Hormuz situation high on the agenda, as officials warned the global economy remains vulnerable to external shocks.