U.S. stock markets closed lower on Friday as market participants remained concerned about soaring crude oil prices. A key weak economic data also dented investors’ confidence in risky assets like equities. All three major stock indexes ended in negative territory. However, last week, both the S&P 500 and the Nasdaq Composite finished in negative territory while the Dow ended in green.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) plummeted 1.2% or 652.82 points to close at 52,215.16 after a choppy session. Notably, 24 components of the 30-stock index ended in negative territory, while six ended in positive territory. At the intraday low, the blue-chip index was down nearly 813 points.

The tech-heavy Nasdaq Composite ended at 25,955.34, sliding 0.2% on weak performance of big corporates. At the intraday high, the tech-laden index was up 102.72 points. The S&P 500 shed 0.5% to finish at 7,623.68. 

Eight out of 11 sectors of the broad-market index ended in negative territory while three finished in positive territory. The Consumer Staples Select Sector SPDR (XLP) tumbled 1.9%. On the other hand, the Energy Select Sector SPDR (XLE) advanced 2.6%.

The fear gauge CBOE Volatility Index (VIX) was up 2.2% to 19.45. A total of 15.4 billion shares were traded on Friday, lower than the last 20-session average of 17.2 billion. Decliners outnumbered advancers by a 1.72-to-1 ratio on the NYSE. On the Nasdaq, a 1.57-to-1 ratio favored declining issues.

Spike in Crude Oil Prices

Crude oil prices reached a five-month high following reports that the United States and Israel might plan a renewed attack on Iran. On the other hand, Iran also reiterated that it will retaliate against any aggression. 

As a result, the international benchmark - Brent crude futures - rose 3.1% to settle at $116.72 per barrel. The U.S. benchmark - West Texas Intermediate crude futures - rose 3.8% to settle at $103.27 per barrel. 

Cyclical Sectors Suffer

During the first four days of last week, artificial intelligence (AI)-driven technology stocks and other stocks related to the high-tech AI infrastructure suffered significantly. However, on Friday, cyclical sectors like industrials, financials and materials suffered the most. In addition, defensive sectors like consumer staples, health care and utilities also witnessed a southward journey.

Since the Dow is inclined toward cyclical stocks, it faced a massive decline. Shares of American Express Co. (AXP Quick QuoteAXP - Free Report) fell 3.7% as the company has decided to retrench 5% of its global workforce in order to prepare for implementing AI technology. 

The stock price of the mining and industrial product giant Caterpillar Inc. (CAT Quick QuoteCAT - Free Report) decreased 2.4% and shares of investment bank behemoth JPMorgan Chase & Co. (JPM Quick QuoteJPM - Free Report) fell 1.5%. Caterpillar currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

University of Michigan reported that the final reading for the consumer sentiment index came in at 48% in October, ahead of the consensus estimate of 46.3%. The final metric for September was 48.1%. The preliminary data for October was 46.3%.

The subindex for current economic conditions fell to 46.7% in October from 50.9% in September. The subindex for consumer expectations rose to 48.8% in October from 46.3% in September. The 1-year inflation index rose to 4.7% in October from 4.6% in September. The long-term 5-year inflation index edged up to 3.5% in October from 3.4% in September.

Weekly Roundup

The last week was mixed for Wall Street. The S&P 500 and the Nasdaq Composite fell 0.5% and 0.7%, respectively. However, the Dow gained 0.4%. Concerns about the continuation of AI trade unnerved investors last week.