Financial markets extended a sharp sell-off at the end of the week, hitting a new low for the year, as the Iran war continues to drive anxiety among investors, businesses and consumers about how long the turmoil will last.

The S&P 500, Nasdaq composite index and Dow Jones Industrial Average all finished the week lower, dropping sharply on Friday. The Nasdaq slid into correction territory Thursday, marking a drop of at least 10 percent from a recent peak, and fell more than 400 points Friday. The Dow entered correction territory on Friday, as well, falling more than 800 points. The S&P notched its fifth losing week in a row.

Investor concerns were driven by energy prices, with gas prices at the pump shooting up to a national average of $3.98, a dollar higher than a month ago. And prices are expected to worsen in coming days, with Brent crude oil prices, an international benchmark, above $113 a barrel Friday, up 50 percent from last month.

“The longer oil prices remain elevated, it’s going to be harder to avoid a bad economic outcome,” said Tom Porcelli, chief economist at Wells Fargo. If the increase in oil prices holds for the next several months, that economic headwind could cancel out the tax cuts and other stimulus that the Trump administration was counting on, he added.

Financial leaders around the world have begun to warn that the global economy is increasingly at risk from the ongoing conflict in the Middle East.

Americans are also feeling down about the economy. Consumer sentiment, a measurement of Americans’ economic perceptions, fell nearly 6 percent to its lowest level since December, according to a closely watched index from the University of Michigan.

Sentiment about the economy had been trending upward in the initial weeks of research, the survey’s early results found, but dipped significantly after the war in Iran began.

Uncertainty around the conflict also sent 10-year treasury yields — a key benchmark for mortgage rates — to their highest levels this year. Treasury yields tend to increase when investors fear inflation, and rising oil prices have raised fears of price increases across the economy. Mortgage rates, which had been easing, spiked to nearly 6.4 percent for a 30-year loan.

The market sell-off came despite President Donald Trump’s extension of a deadline to attack Iranian energy infrastructure; previous signals by Trump he would defuse the conflict have calmed markets. But despite White House claims of diplomatic talks, the critical Strait of Hormuz, which connects the Persian Gulf to the Gulf of Oman, remains effectively closed to commercial marine traffic.

Fuel surcharges, or additional fees to cover the cost of transportation, are also starting to pop up — the U.S. Postal Service said this week it is adding an 8 percent fee on some packages.

The price of diesel has also spiked; the fuel is used to transport goods around the country. That could eventually lead to higher prices on shelves, said Rebecca Babin, a senior equity trader at CIBC Private Wealth.

Small businesses are already feeling hits from tariff uncertainty, and adding in the war and energy crisis are making them especially wary. (Source: The Washington Post)

Story Date: March 29, 2026