Nasdaq finishes sharply lower as oil surges on Middle East tensions

Stocks finished sharply lower on Friday, capping off what’s been a volatile and broadly negative week for equities.
The Nasdaq led declines, falling 2% (down 443 points) to 21,648, while the Dow Jones Industrial Average slipped 1% (down 444 points) to 45,577. The S&P 500 dropped 1.5% to 6,506, and the Russell 2000 underperformed, sliding 2.4% to 2,436.
The selloff comes as geopolitical tensions in the Middle East continue to dominate sentiment. With the Iran conflict intensifying, oil prices remained elevated, and investors are increasingly weighing the risk of disruptions to global energy flows—particularly around the Strait of Hormuz, a critical shipping route.
Energy stocks were a relative bright spot, with the sector on pace to close the week up more than 3% as crude prices surged. Outside of energy, however, weakness was widespread. Most sectors ended the week in the red, with Materials and Utilities among the biggest laggards.
Overall, it was a risk-off finish to the week, with markets pressured by a mix of geopolitical uncertainty, rising energy prices, and broad-based selling across equities.
3:45pm: Proactive news headlines
Lithium Americas Corp (TSX:LAC, NYSE:LAC) reported a larger-than-expected fiscal Q4 2025 loss, driving its shares lower amid investor disappointment with earnings performance.
VivoPower PLC (NASDAQ:VIVO, FRA:51J) is reducing its public float by converting a portion of shares into insider-held, higher-voting restricted stock as part of a strategy to better align management with long-term shareholder interests.
Xpeng Inc (NYSE:XPEV) posted its first-ever quarterly profit, but its shares declined as investors focused on a weaker near-term outlook despite the milestone turnaround.
Phunware Inc (NASDAQ:PHUN, FRA:2RJA) reported higher revenue, improved margins, and a narrower loss in Q4 as it pivots toward higher-margin AI-driven software solutions, particularly in the hospitality sector.
Giyani Metals Corp (TSX-V:EMM, OTC:CATPF, FRA:KT9) secured additional funding through amendments to its convertible loan facility with the IDC of South Africa, increasing available capital to support its subsidiary’s development activities.
2:45pm: Market movers
Arm Holdings PLC is expected to expand beyond its traditional licensing model by developing its first standalone merchant CPU, a move analysts say could significantly broaden its market and earnings potential in AI and agentic computing.
Lithium Americas Corp saw its shares decline after reporting a wider-than-expected fourth-quarter loss, highlighting ongoing financial pressure as results missed analyst estimates.
Planet Labs PBC reported strong fourth-quarter results and raised its fiscal 2027 guidance, driving shares higher and prompting analysts to maintain a positive outlook with an increased price target.
Super Micro Computer Inc faces legal scrutiny after a co-founder was arrested and charged in connection with an alleged $2.5 billion scheme to smuggle high-performance servers containing Nvidia GPUs to China.
Xpeng Inc posted its first quarterly profit, but its shares fell as investors focused on a weaker near-term outlook despite the company’s improved year-over-year financial performance.
1:30pm: Fed hike talk grows
Markets are increasingly debating whether the Federal Reserve’s next move could shift from cuts to hikes, as expectations for rate reductions have largely faded. Analysts at Bank of America say a rate hike would require a combination of macro conditions, noting: “We see at least three conditions for the Fed to hike: a stable labor market (u-rate <4.5%), further increases in core inflation (core PCE > 3.2%) and Powell as Chair.” They add that such a scenario is most likely if geopolitical tensions persist but remain contained.
Looking ahead, the upcoming week features limited economic data but a busy slate of Federal Reserve speakers, which could further shape policy expectations. Data releases include PMIs, import prices, jobless claims, and final consumer sentiment, which is expected to soften.
At the March FOMC meeting, the Fed held rates steady, raised inflation and growth projections, and maintained longer-term rate forecasts, while Chair Jerome Powell emphasized inflation risks over labor market weakness, reinforcing a cautious stance.
12:05pm: Yields surge
"Markets reacted sharply to escalating Middle East tensions, with equities falling to multi-month lows, gold dropping 2% and heading for its worst weekly fall in decades as surging energy prices reduced expectations for rate cuts and raised the prospect of tighter policy," said IG's Axel Rudolph on Friday.
"US Treasury yields climbed to their highest level since mid-2025, with investors increasingly pricing in a more hawkish Federal Reserve amid concerns that the conflict could sustain inflationary pressures."
11:00am: Super Micro slumps
Super Micro Computer Inc (NASDAQ:SMCI) co-founder Yih-Shyan Liaw has been arrested and charged in connection with an alleged $2.5 billion scheme to smuggle high-performance servers containing Nvidia GPUs to China, US prosecutors said.
Liaw was arrested on charges related to what authorities described as a scheme that funneled approximately $2.5 billion in servers through a Southeast Asian shell company to Chinese buyers, according to the indictment.
Prosecutors allege that the group shipped hundreds of millions of dollars’ worth of equipment in short periods, including about $510 million in servers over a three-week span in spring 2025, while attempting to evade US export controls.
The indictment claims the defendants used fabricated documentation and physical methods to conceal the true destination of the hardware, including creating dummy servers to mislead compliance checks and altering identifying labels.
Supermicro said in a statement it was not named as a defendant in the indictment and that the conduct described involved individuals acting outside company policies and controls. The company added it maintains a compliance program designed to adhere to US export regulations.
Shares of Supermicro plummeted 28% in early trading Friday following the news.
10:00am: Markets weigh energy route risks
Wall Street is heading into the final session of the week with a defensive tone, as traders balance geopolitical risks with a steady stream of corporate developments.
The Nasdaq is leading declines just after the open, down about 1.2%, while the S&P 500 is off roughly 0.9% and the Dow Jones is down about 0.6%. The Russell 2000 is also softer, suggesting broad-based weakness across large- and small-cap stocks.
Sentiment is being weighed by geopolitical concerns, with investors considering the implications of potential US efforts tied to an Iranian energy terminal that could affect flows through the Strait of Hormuz, a key global shipping route for oil. Any escalation in that region tends to raise uncertainty around energy markets and global supply chains.
On the corporate front, shares of Supermicro Computer are sharply lower in premarket trading after reports that a co-founder was charged in connection with alleged export violations involving Nvidia-powered servers shipped to China. The developments have added pressure to the broader AI hardware space, especially given Supermicro’s role as a key assembler of systems using components from Nvidia, which accounts for a notable portion of Nvidia’s revenue, according to reports.
In contrast, FedEx is moving higher after the company reported earnings and issued a more upbeat outlook, signaling expectations for stronger sales and profitability ahead. The results are offering a bright spot in an otherwise cautious premarket session.
Meanwhile, Unilever is in focus after reports it is in talks to sell its foods business to McCormick & Company, a potential strategic shift that investors are watching closely as consumer goods firms continue to streamline portfolios.
8am: Wall Street called lower
US stocks are heading for a weak finish to a turbulent week, as oil prices clawed back Thursday's losses despite efforts by Washington and Israel to calm energy markets.
Nasdaq futures are down 0.6% in pre-market trading, with S&P 500 and Dow Jones futures slipping 0.5% and 0.4%, respectively. Brent crude, which had dipped to around $107 a barrel earlier, has bounced back to $110.21, while WTI futures are trading at $95.13.
Thursday brought some brief respite, when Brent fell as much as 2% after Israeli Prime Minister Benjamin Netanyahu suggested Israel could help the US reopen the Strait of Hormuz and hinted the conflict could end sooner than many feared. The comments lifted Wall Street off its lows by raising hopes of de-escalation and easing fears over supply disruptions.
"We are in the middle of a major selloff in risk assets, but it’s non-linear," commented Saxo UK investor strategist Neil Wilson. "Are we near the end, or is there more to come? The path depends on the expected outcome of the war, which is totally unknown."
Wilson noted that stocks opened higher on Friday morning in Europe, after a steep selloff in the previous session, because of the apparent de-escalation on energy infrastructure.
"Broadly, markets are starting to better price duration – i.e., a longer, protracted conflict and a long tail of restoring energy flows to anything like pre-war levels, which will ensure not just headline inflation rises in the short-term, but could also support higher longer-term inflation expectations. To illustrate, Iranian attacks will wipe out 17% of Qatar’s LNG capacity for three to five years, QatarEnergy CEO Saad al-Kaabi said yesterday."
In Europe, London's FTSE 100 has recovered from mid-morning weakness and traded 0.2% firmer by lunchtime in the UK. Frankfurt's DAX was down 0.1%, and the Paris CAC 40 was marginally higher.