A spike in oil prices and weak earnings from Tesla and Alphabet pushed the Dow down more than 500 points on Thursday, its fifth losing day in six. Brent crude topped $100 a barrel for the first time since late May after tankers were reportedly struck in the Red Sea. Wall Street edged higher on Friday but stayed on track for weekly losses.
The Dow Jones Industrial Average dropped more than 500 points, around 1%, on Thursday for its fifth negative day in six, as surging oil and weak megacap earnings pressured equities. The S&P 500 and Nasdaq turned in their worst one-day performances since June 23, falling 1.2% and 2.2%.
Oil's jump past $100 rattles equities
Brent crude futures topped $100 per barrel for the first time since late May, soaring about 7% on Thursday to close at $100.69. West Texas Intermediate advanced roughly 6% on the day, after two Saudi oil tankers were reportedly struck in the Red Sea.
The move revived inflation fears and lifted Treasury yields, which had jumped before the 10-year settled flat at 4.705%. Benjamin Jones, global head of research at Invesco, said the Houthi attacks on Saudi tankers heightened the risk that another key export route could be disrupted. He said crude prices were likely to remain near or above $100 a barrel in the coming months.
Tesla and Alphabet drag on Big Tech
Quarterly results from the two megacaps weighed further on the major U.S. indexes. Tesla tumbled nearly 15%, its worst day since March 10, 2025, after missing second-quarter earnings estimates. Alphabet lost 7% after raising its full-year capital-expenditure guidance, its biggest daily decline since May 7, 2025.
Worry over the rising cost of AI investment has become a central market theme, after the two companies' results highlighted heavier capital spending and cash burn. That set a cautious tone before next week's earnings from Microsoft, Amazon and Meta. According to Reuters, Wells Fargo's Sameer Samana pointed to market worry over cash flows: "It looks like the market is starting to worry a little bit about cash flows."
Friday's bounce leaves weekly losses intact
Stocks recovered some ground on Friday as oil prices eased. By late morning the Dow had risen 358.97 points, or 0.70%, to 52,073.03, with the S&P 500 and Nasdaq also higher. Even so, the major indexes stayed on track for weekly losses. The Dow was headed for a third consecutive week in the red.
Fresh risks stayed in focus. The Trump administration imposed new tariffs of 10% and 12.5% on 60 trading partners as a temporary 10% global tariff expired. U.S. missiles struck targets across Iran on Friday, keeping Middle East tensions in view. Markets now price a roughly one-in-three chance of a rate hike at next week's Federal Reserve meeting, up from 12% a week earlier.
Sources: CNBC, Reuters via Investing.com
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