Wall Street falls for the third week as oil prices surge and economic concerns escalate.

U.S. stock markets closed last week on a weak footing, marking a third consecutive week of losses as rising oil prices and renewed inflation concerns weighed on investor sentiment. Energy markets have quickly re-emerged as the dominant macro driver, with crude prices climbing sharply following geopolitical tensions in the Middle East.

During Friday’s session, the Nasdaq Composite dropped 0.9%, while the S&P 500 slipped 0.6%, and the Dow Jones Industrial Average lost 0.3%. All three indices finished at their lowest closing levels of the year, highlighting a shift toward caution across equity markets.

The latest leg lower coincided with a fresh surge in oil prices. West Texas Intermediate (WTI) crude, the U.S. benchmark, climbed roughly 2.5% to trade near $98 per barrel. That represents a dramatic jump from the $67 level seen before the U.S. and Israeli strikes on Iran on February 28.

Meanwhile, Brent crude, the global benchmark, eased slightly to around $103 per barrel after closing above the $100 mark for the first time since August 2022 in the previous session.

With oil markets tightening rapidly, policymakers have begun moving to stabilize supply.

U.S. Treasury Secretary Scott Bisent announced that Washington would temporarily allow countries to complete purchases of Russian oil shipments already at sea, aiming to prevent further disruption in global energy flows.

At the same time, the International Energy Agency (IEA) said it plans to release around 400 million barrels from strategic reserves, describing the current situation as the largest supply disruption in modern oil market history.

These measures are designed to prevent oil prices from feeding into a fresh inflation surge.

Investors also digested new inflation data last week. The Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, rose 2.8% year-on-year in January, slightly below expectations of 2.9%.

On a monthly basis, the index increased 0.3%, easing from 0.4% in December.

However, core PCE inflation — which excludes food and energy — remained sticky at 3.1% annually and 0.4% month-on-month, reinforcing the idea that inflation pressures have not fully disappeared.

At the same time, economic growth data showed signs of weakness. U.S. GDP growth for the fourth quarter was revised down to just 0.7%, roughly half the previous estimate, adding to concerns that the economy may be losing momentum.

In the bond market, yields moved higher as investors reassessed the outlook for inflation and interest rates.

The yield on 10-year U.S. Treasury bonds rose to 4.29%, up from 4.27% in the previous session, marking its highest closing level since early February.

Higher yields typically translate into more expensive borrowing for consumers and businesses, which can further weigh on economic activity and equity valuations.

Commodity markets saw mixed movements.

Gold futures fell around 2%, trading near $5,030 per ounce, while silver dropped sharply by about 5.5% to roughly $80.30 per ounce.

In currency markets, the U.S. dollar index gained 0.7% to reach 100.44, reflecting strong demand for the dollar as investors sought safety amid market uncertainty.

In the cryptocurrency market, Bitcoin traded near $71,200, recovering slightly after briefly dipping toward $70,000 overnight.

At the corporate level, several high-profile stocks experienced notable declines.

Adobe shares fell around 7% after CEO Shantanu Narayan announced plans to step down after 18 years leading the company.

Retailer Ulta Beauty was among the worst performers on the S&P 500, plunging 14% after issuing weak guidance for annual sales and earnings.

Major technology stocks — often referred to as the “Big Seven” — also moved lower collectively. Meta Platforms led the declines, dropping nearly 4% following reports that the launch of a new artificial intelligence model had been delayed due to performance concerns.

Elsewhere, fertilizer producers came under pressure. Mosaic shares fell about 6%, while CF Industries dropped roughly 4.5%.

Outside the United States, markets delivered a mixed performance.

Asian equities closed with mixed results, as Japanese stocks and several regional markets were pressured by rising oil prices and a stronger dollar, while some commodity-linked markets posted modest gains.

European markets, however, ended broadly lower as investors worried that higher energy costs could slow economic growth across the region.

Market Outlook

Looking ahead, investors are turning their attention to next week’s Federal Reserve policy meeting, where interest rates are widely expected to remain unchanged.

The central bank now faces a delicate balancing act: inflation remains stubborn, but economic growth appears to be slowing.

For traders, the immediate market direction may depend heavily on oil price movements and geopolitical developments. If crude continues climbing toward the $100–$110 range, inflation fears could intensify, potentially pushing bond yields higher and putting additional pressure on equities.

At the same time, any stabilization in energy markets — or signs that central banks remain comfortable holding rates steady — could help restore confidence and stabilize global risk sentiment.

For now, markets remain caught between rising energy costs and slowing economic momentum, a combination that is likely to keep volatility elevated in the weeks ahead.