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.