US Stocks Plunge as Inflation Fears Rise Amid Crude Oil Surge
US stocks today: Dow Jones crashes 500 points on mounting inflation worries
The Economic TimesImage: The Economic Times
U.S. stocks fell sharply on Friday, with the Dow Jones Industrial Average dropping 537.35 points due to rising crude oil prices and inflation concerns. The yield on 10-year Treasury notes reached its highest level since May 2025, reflecting fears of a prolonged economic impact from the Iran conflict and the potential for interest rate hikes by the Federal Reserve.
- 01The S&P 500 lost 91.62 points (1.22%), closing at 7,409.62 points.
- 02The Nasdaq Composite fell 412.61 points (1.53%), ending at 26,226.35.
- 03The yield on 10-year Treasury notes reached its highest level since May 2025.
- 04The odds of a Federal Reserve interest rate hike in December increased to 40%, up from 13.6% a week prior.
- 05Nvidia, AMD, and Intel stocks declined significantly, while Microsoft gained after a hedge fund investment.
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U.S. stocks experienced a significant downturn on Friday, with the Dow Jones Industrial Average falling 537.35 points (1.06%) to close at 49,531.70 points. This decline was driven by rising crude oil prices, which sparked fears of escalating global inflation. The yield on 10-year Treasury notes hit its highest level since May 2025, indicating increasing borrowing costs and concerns about long-term inflation. Analysts noted that the market had become overly optimistic, particularly in the wake of the AI trading momentum, and was now reacting to more sobering economic indicators. The recent meeting between U.S. President Donald Trump and Chinese President Xi Jinping yielded few concrete results, leaving investors wary of ongoing tensions in the Middle East, particularly with Iran. As Jerome Powell concluded his term as Federal Reserve Chair, incoming Chair Kevin Warsh faces the challenge of addressing potential inflationary pressures, with the likelihood of a rate hike by December now at 40%. Major tech stocks like Nvidia and AMD fell sharply, while Microsoft saw a rise due to new investments.
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The decline in stock prices and rising interest rate expectations could lead to higher borrowing costs for consumers and businesses, affecting loans and mortgages.
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