The Dow Jones Industrial Average experienced a sharp decline on Friday, dropping 652.82 points or 1.23% to close at 52,215.16. This broad sell-off extended beyond technology, which had led losses the previous day, to other sectors including consumer staples, utilities, and healthcare. The market was pressured by rising U.S. oil prices breaking above $100 a barrel, amid renewed concerns about escalating tensions between the U.S. and Iran. Key Dow components such as American Express, which announced a 5% global workforce cut citing AI automation preparations, fell significantly, further weighing on the index.

Technology stocks saw mixed performance following a tech-led sell-off earlier in the week, as investors began to reassess the implications of high corporate borrowing costs and rising interest rates on AI and data center investments. While Microsoft showed some gains, chipmakers like Micron Technology and Advanced Micro Devices rallied nearly 3% and 2%, respectively. Portfolio manager Jed Ellerbroek noted that although emotions and fear have driven a flight from tech stocks recently, strong earnings from several companies have begun to offer justification for renewed investor confidence in the sector.

The bond market reflected shifting sentiment as well, with the 10-year Treasury yield rising just below 5% at 4.999%, signaling investor caution amid the ongoing corporate borrowing surge to fund AI infrastructure. Oil prices surged with West Texas Intermediate crude settling 3.8% higher at $103.27 per barrel and Brent crude up 3.1% at $116.72. These price spikes are driven by reports of potential U.S. and Israeli plans for strikes against Iran, heightening geopolitical risk that is translating into market volatility and inflation concerns.

Overall, the S&P 500 and Nasdaq Composite also ended lower by 0.52% and 0.21%, respectively, with the S&P 500 down 0.5% on the week despite a slight weekly gain for the Dow. Defensive sectors and discount retailers came under pressure as rising diesel costs threaten margins, while clean energy ETFs hit 52-week lows even as traditional oil and gas giants like ExxonMobil and Chevron reached record highs. The market volatility index (VIX) surged back above 20, underscoring heightened investor anxiety amid these complex economic and geopolitical challenges.