Stocks on Wall Street declined Friday as oil prices surged to their highest levels in over four years, intensifying pressure on the market. The Standard & Poor’s 500 index fell 0.5 percent, marking its second consecutive weekly loss. The Dow Jones Industrial Average dropped 1.2 percent, shedding 652 points, while the Nasdaq Composite declined 0.2 percent after giving up gains earlier in the day.

The price of Brent crude oil increased 3.1 percent to settle at $116.72 per barrel, its highest level since June 2022. West Texas Intermediate crude rose nearly 4 percent to $103.27 a barrel. This jump in oil prices has been driven largely by ongoing geopolitical tensions in the Middle East, where the U.S. and Iran remain in conflict. Reports of planned U.S. military actions following recent midterm elections, alongside the evacuation of non-emergency personnel from Saudi Arabia, have contributed to concerns over supply disruptions. The tightening global oil supply has fueled increases in the costs of gasoline—as the national average price reached $4.29 per gallon—food, and other consumer goods.

The energy sector saw gains amid the price surge, with Chevron rising about 2.9 percent and ConocoPhillips up 3.6 percent. However, higher energy costs weighed on much of the broader market. Nearly three-quarters of the S&P 500 stocks declined. Industrial companies were particularly affected, with Caterpillar falling 2.4 percent. Financial firms mostly retreated despite some posting strong earnings; American Express dropped 3.7 percent while announcing significant job cuts, its first major layoffs in roughly a decade. Major banks including JPMorgan Chase and Citigroup also slipped.

Meanwhile, several technology companies related to artificial intelligence bucked the downward trend, recording gains and helping to partially cushion the market's losses. Shares of Micron Technology, Intel, Microsoft, and Advanced Micro Devices advanced between 0.7 and 2.5 percent. Investors remain cautious about the sustainability of high valuations in AI-related firms because of the substantial upfront investments required to develop AI infrastructure and uncertainty over the timing of returns. High interest rates, which increase borrowing costs, add further concerns. Upcoming earnings reports from influential AI players such as Alphabet, Microsoft, and Amazon are highly anticipated as investors seek clearer signals on profitability prospects.

U.S. Treasury yields edged higher Friday after sharp declines the previous day, with the 10-year Treasury yield rising slightly to 4.99 percent. Yields have increased globally amid concerns about high government debt levels and persistent inflation, which remains stubbornly above 3 percent in the United States. The Federal Reserve raised its benchmark interest rate at its most recent meeting to combat inflation and is expected to hold rates steady at the upcoming meeting, though a rate hike in December remains probable. Economic data releases next week, including the personal consumption expenditures index—a key measure of inflation—are expected to provide further insight into the inflation trajectory and policy response.

European markets closed mostly lower, with France’s main index down 0.4 percent, even as yields on some government bonds eased slightly. Overall, market sentiment remains cautious amidst geopolitical uncertainties and economic concerns linked to rising energy costs and monetary tightening.