Wall Street Woes: Stocks Plunge Amid Middle East Turmoil

US stocks declined significantly, marking a five-week losing streak as geopolitical tensions with Iran heighten. The S&P 500, Dow Jones, and Nasdaq experienced steep drops. Oil prices fluctuated as President Trump extended a deadline regarding Iran's actions. The ongoing conflict threatens to severely impact the global economy and energy markets.

The U.S. stock market endured a dramatic downturn on Friday, culminating a five-week spell of losses not seen in nearly four years. The S&P 500 dipped by 1.7%, marking its worst performance since the conflict with Iran resumed. Meanwhile, the Dow Jones Industrial Average plummeted by 793 points, a decline of over 10% from its peak last month, and the Nasdaq composite sank by 2.1%.

Despite reassurances of a potential diplomatic breakthrough from President Donald Trump, tensions in the Middle East remained high. Trump announced an extension of his ultimatum to Iran regarding the Strait of Hormuz—a geopolitical flashpoint critically affecting oil passage—to April 6. This move initially led to some stabilization in oil prices, although they surged anew later. Iran continued its aggressive stance, with Israel ready to amplify its military response, further unsettling investors worried about energy supply disruptions and inflation.

Investor confidence is waning amidst the geopolitical volatility. Brent crude oil prices rose by 3.4% to $105.32 per barrel, an increase from $70 pre-war. Analysts predict that prolonged conflict could send oil prices soaring to $200 per barrel, reminiscent of the 2008 financial crisis. The downturn has also affected consumer sentiment in the U.S., as reported by the University of Michigan, influencing the broader economy driven by consumer spending.

(With inputs from agencies.)