US Stocks Fall, Oil Rises

What happened: US stock markets fell on Friday, with the S&P 500 and Nasdaq declining by 0.44% and 0.72% respectively, as rising oil prices and renewed Middle East tensions weighed on investor sentiment. Oil prices surged, with Brent crude settling at $100.06 per barrel, up 1.2% on the day. Tech stocks, particularly chipmakers, were under pressure, with the Philadelphia Semiconductor Index dropping 3.8%. Meanwhile, USA Rare Earth stock crashed over 10% after Roth Capital reduced its price target.

Market impact: Energy stocks like ExxonMobil and Chevron gained, while tech giants like Apple and Microsoft retreated. The energy sector in the S&P 500 rallied 2.5%, while the tech sector fell 1.7%. Higher oil prices could accelerate inflation, pressuring stocks and pushing investors towards defensive sectors. The sell-off in tech stocks was driven by AI fears and regulatory worries, with investors rotating out of growth stocks.

What to watch next: On Monday, investors will be watching US crude futures, which surged above $100 for the first time since 2022. Inflation data due out this week, including the Consumer Price Index (CPI) on Wednesday, will provide insights into the impact of higher energy prices on the broader economy. Additionally, earnings reports from key tech companies, such as Microsoft on Tuesday and Google on Thursday, could drive further market movement.