Dow falls 652 points as Brent oil hits highest settle since April

The Dow Jones Industrial Average dropped 652.82 points, or 1.23%, to close at 52,215.16 on Friday, Oct. 23, CNBC reported. Defensive stocks led the slide as oil prices climbed on fears about Middle East energy supplies.

Technology shares, which had sold off a day earlier, mostly held steady. Reuters reported that the S&P 500 slipped 0.52% and the Nasdaq Composite lost 0.21%, smaller declines than the Dow's.

Key facts

• The Dow lost 652.82 points, or 1.23%, CNBC reported.
• The S&P 500 closed at 7,623.68, down 39.75 points, according to Reuters.
• Brent crude settled at $116.72 a barrel, up $3.55, its highest close since April 29, Reuters said.
• The energy sector in the S&P 500 gained 2.5% to reach a record high, according to Reuters.
• The Dow still rose 0.4% for the week, Reuters reported.

How the markets moved

The Dow ended the day at 52,215.16 after its 652.82-point decline, CNBC said. Reuters reported that the S&P 500 shed 39.75 points to finish at 7,623.68. The Nasdaq Composite gave up 53.52 points to end at 25,955.34, Reuters said.

Several groups that investors often treat as safer bets lost ground. CNBC reported that consumer staples, utilities and health care stocks all declined. Caterpillar and Goldman Sachs also pulled the Dow lower, according to CNBC.

American Express was one of the biggest drags. CNBC said the Dow member dropped more than 3% after saying it would cut about 5% of its global workforce. The company tied the cuts to the need to get ready for artificial intelligence, CNBC reported.

Chip stocks, by contrast, found some footing. Reuters said the semiconductor index rose 0.4% one day after its steepest single-day fall since June.

Why oil jumped

Oil prices rose sharply. Reuters reported that Brent crude futures ended at $116.72 a barrel, a gain of 3.14%, the highest settlement since April 29. U.S. West Texas Intermediate crude finished at $103.27 a barrel, up 3.8%, according to Reuters.

News outlets pointed to different causes. Reuters said Houthi attacks inside Saudi Arabia stoked concern that Middle East energy supplies could face more disruption. CNBC said oil also climbed on word that the U.S. and Israel might be preparing fresh attacks on Iran, and on Iran's statement that it was ready to respond.

Energy companies gained as prices rose. Reuters reported that the S&P 500 energy sector climbed 2.5% to a record.

Background

Friday's session came after a rough day for technology. CNBC reported that on Thursday, a wide range of tech shares retreated as traders worried about large debt loads and higher borrowing costs facing AI and other technology firms.

The oil market has been shaped by conflict in the region for months. CNBC says the conflict in the region that involves Iran started in late February.

Interest rates and consumer mood were also in focus. Reuters said the yield on the 10-year Treasury note climbed 3.7 basis points, ending at 4.99%. CNBC reported that the University of Michigan's consumer sentiment index stood at 48 for late October, down 0.1 point from September. One-year inflation expectations in the same survey climbed to 4.7%, CNBC said.

Taken together, the day brought higher bond yields and higher inflation expectations.

What it means for you

Higher fuel costs can reach shoppers in indirect ways. CNBC reports that diesel prices in the third quarter were up about 60% from a year earlier, and analysts expect that to squeeze retailers' profit margins.

For investors, the week was mixed. Reuters said the S&P 500 fell 0.5% for the week and the Nasdaq lost 0.7%. The Dow, however, gained 0.4% for the week, its third weekly rise in a row, according to Reuters.

Workers at American Express are directly affected by Friday's news. CNBC reported that the company plans to cut about 5% of its staff worldwide, citing preparation for AI.

For people who own energy stocks, Friday was a strong day. The sector finished at a record high after a 2.5% gain, Reuters said. Chip stock investors also saw some relief after Thursday's losses.

Higher bond yields matter to borrowers and savers alike. The 10-year Treasury yield, which Reuters said ended at 4.99%, is a benchmark that many loan rates follow. It is not known whether the oil spike will push gas prices higher next week.

What happens next

Corporate earnings take center stage in the coming days. Reuters said about one-third of S&P 500 companies will report results next week, including Alphabet, Microsoft and Amazon. Those reports will give investors a closer look at how big tech companies are faring after Thursday's sell-off.

FAQ

How much did the Dow fall on Friday? It fell 652.82 points, or 1.23%, to 52,215.16, CNBC reported.

Why did oil prices rise? Reuters pointed to Houthi attacks in Saudi Arabia. CNBC cited reports that the U.S. and Israel could renew attacks on Iran.

How high did oil go? Reuters said Brent settled at $116.72, its highest since April 29. Other outlets have described the high differently.

Did the Dow gain for the week? Yes. Reuters said the Dow rose 0.4% for the week, its third straight weekly gain.

Why did American Express shares drop? CNBC said the stock slid more than 3% after the company announced job cuts of about 5%.

What is coming next week? Reuters said roughly a third of companies in the S&P 500 are due to post earnings, including Alphabet, Microsoft and Amazon.