The latest round of Houthi missile strikes on Saudi facilities reignited concerns over oil supply, pushing Brent crude to its highest settlement since the spring surge. Higher energy prices echoed across the trading day, unsettling investors who had been focused on artificial-intelligence earnings. By market close, the S&P 500 slipped 0.5%, the Nasdaq Composite fell 0.2% for a second consecutive weekly loss, while the Dow Jones Industrial Average dropped 1.2% yet still managed a third straight weekly gain. Treasury yields nudged back toward a critical threshold as inflation fears resurfaced, driven by the oil bounce.
Sector winners and laggards in the wake of the oil shock
Energy proved the sole bright spot, rallying 2.6% as oil-linked stocks absorbed the price surge. In contrast, the consumer discretionary and communication services sectors lagged, shedding 1.66% and 1.78% respectively. The technology index edged up modestly 0.49% after a chaotic Thursday, allowing the Nasdaq to outperform the Dow. Real estate managed a small gain of 0.12%, while utilities and materials slipped 0.72% and 0.74%. Among individual performers, Robert Half (RHI) surged 21.7% after posting earnings per share (EPS) of $0.49, topping forecasts, and reporting a return to growth in its Talent Solutions division.
Other standout movers included First Citizens BancShares (+8.2%) following a $1.2 billion share-buyback announcement, and Schlumberger (+7.1%) after its adjusted EPS of $0.64 exceeded expectations and hinted at a stronger 2027 outlook amid Middle-East recovery. Conversely, LKQ slumped 22.5% after preliminary results missed guidance, prompting leadership changes. Notable chip makers—Micron, AMD and Intel—each climbed roughly 1.7% after rebounding from Thursday’s market rout.
Macro backdrop: inflation, rate policy and geopolitical risk
September’s consumer-price index climbed 3.7%, the highest since May, propelled by the oil price shock. Core CPI, which strips out food and energy volatility, rose 2.6%, underscoring the spill-over of energy costs into broader manufacturing and transportation expenses. The Federal Reserve, already having raised its policy rate by a quarter-percentage point in September, now faces heightened pressure to continue tightening. Market-based tools such as CME Group’s FedWatch indicate a strong likelihood of a second 0.25-point hike at the December meeting, followed by a further 0.30-point increase in March, which would push the federal-funds target range to 4.25-4.50%—a level not seen since August 2025.
Geopolitical tensions added another layer of uncertainty. In addition to the Houthi attacks, Iran’s army chief warned of readiness for asymmetric warfare, while Israel ordered a full West Bank closure after the killing of two soldiers near Hebron. Meanwhile, France’s bond market turmoil and Brazil’s electoral runoff kept global investors on edge. On the corporate front, OpenAI is reportedly nearing a $30 billion funding round at a $1.25 trillion valuation, signaling continued appetite for AI despite the market’s current jitteriness.
