Markets Whipsaw as Oil Surge and Iran Tensions Drive Volatility

US markets closed a volatile Thursday session mixed, but managed to secure weekly gains as investors navigated rising oil prices and escalating tensions tied to the Iran conflict. Trading was choppy ahead of the Good Friday holiday, with sentiment swinging between hopes of supply stabilisation and fears of further military escalation.

The Nasdaq Composite edged up 0.2%, while the S&P 500 gained 0.1%. The Dow Jones Industrial Average slipped 0.1%, snapping a three-session winning streak. Despite the mixed close, all three indices posted strong weekly gains, breaking a five-week losing run, with the Nasdaq up 4.4%, the S&P 500 rising 3.4%, and the Dow adding 3% in a shortened four-day week.

Markets opened sharply lower before paring losses on reports that Iran was working with the Sultanate of Oman to reopen the Strait of Hormuz, briefly lifting expectations of improved oil supply flows. However, those gains faded as renewed escalation rhetoric from Donald Trump weighed on sentiment, pushing equities back into the red before a late-session rebound.

Energy markets remained the dominant driver. US benchmark WTI crude surged to around $111.5 per barrel after touching near $114, while Brent crude climbed above $109, intensifying concerns over inflation and input costs across sectors.

Rate-sensitive and fuel-dependent stocks came under pressure, with airlines and cruise operators among the worst performers as higher oil prices threatened margins. Meanwhile, technology stocks delivered a mixed performance, with Tesla falling 5.5% after weaker-than-expected delivery figures, making it one of the session’s laggards.

On the upside, Globalstar jumped around 13% on reports of potential acquisition interest from Amazon, while Nike extended prior losses following earlier declines.

In fixed income, the yield on 10-year US Treasuries eased below 4.31%, reflecting a cautious shift into safer assets amid uncertainty. The US dollar index rose 0.4%, while gold fell 2.5% to around $4,695 per ounce, suggesting uneven safe-haven demand. Bitcoin also retreated to $67,000 after overnight gains.

Market Outlook:

With US markets closed for the Easter holiday, attention shifts to March labour market data, which could set the tone when trading resumes. However, geopolitical developments remain the primary catalyst. Oil price direction—particularly any signals around supply flows through the Strait of Hormuz—will be critical in shaping near-term sentiment.

Elevated energy prices are likely to keep pressure on equities, especially in consumer and transport sectors, while supporting energy stocks. Volatility is expected to persist, with markets highly sensitive to headlines, and any credible de-escalation could trigger a short-term relief rally.