Wall Street’s Friday Selloff Slams Mag 7 and S&P 500’s 493 Other Stocks into Correction Territory

A brutal Friday selloff on Wall Street has plunged the S&P 500 into correction territory, marking the first major U.S. benchmark to suffer a drop exceeding 10% from its peak in 2026. The decline engulfed the Magnificent 7 tech giants alongside every other component of the index, as surging oil prices above 50% on Middle East tensions hammered cyclical small-cap stocks and crushed hopes for a sustained rotation away from mega-caps.

US and Israel’s war in Iran and surging oil prices keep dragging Wall Street

Stocks swung hard through Friday’s session as the conflict involving Iran and Israel kept getting worse and oil kept climbing. Overnight, Iran and Israel exchanged more strikes. Iran also launched fresh attacks on energy sites in the Persian Gulf.

The Wall Street Journal, citing U.S. officials, reported that the Pentagon was sending thousands of additional Marines to the Middle East. CBS News also reported that “heavy preparations” were being made for possible ground troop deployment to Iran, citing multiple sources.

The selling got worse later in the day after Reuters reported that Iraq had declared force majeure on all oil fields operated by foreign companies. That headline pushed energy prices even higher. Brent crude topped $113 a barrel at its high of the day, while WTI crude traded above $98.

For Wall Street, that was a direct hit to risk appetite. Traders were already nervous about war, and higher oil only added another problem. It raised fresh fears that inflation could heat up again just as investors were hoping price pressure might cool.

That fear spilled into the bond market too. Treasury yields rose Friday as investors pulled back expectations for Federal Reserve rate cuts. Higher yields added more stress to stocks and made the day even worse for sectors that usually do better when rates are calm.

By the close, the major averages had posted their fourth straight losing week.

Even though the S&P 500 has held up better than the other big indexes, it is still down about 7% from its recent high. Wall Street did not get much comfort from that.

Four out of five S&P 500 stocks fall as traders hit nearly every sector

By the end of trading, the Dow Jones Industrial Average had dropped 443.96 points, or 0.96%, to 45,577.47. The S&P 500 fell 1.51% to 6,506.48. The Nasdaq Composite lost 2.01% and closed at 21,647.61.

At their intraday lows, both the Dow and the Nasdaq had traded in correction territory, though each finished just above that level. The Russell 2000 was the one that fully crossed the line.

The pain was spread almost everywhere. About four out of every five S&P 500 stocks fell on Friday.

Roughly 400 companies in the index were trading lower during afternoon action while the full benchmark was down more than 1.5%. The bull market’s top tech winners were not spared.

Nvidia and Tesla each fell 3%. Sector losses were harsh too. Utilities dropped more than 3.5%. Real estate and information technology each fell more than 2%. Even the defensive corners of Wall Street got hit as yields moved higher.

The monthly damage is starting to pile up. With this week’s losses, the Dow is down about 6% in March. If that holds through month-end, it would be the Dow’s worst monthly drop since 2022.

Still, UBS Global Wealth Management said in a Friday note that it was keeping its bullish call for the end of the year. Strategist Sagar Khandelwal wrote:-

“For the future, we maintain a constructive view on markets, and expect global equities to rise by end-2026 but with periodic bouts of volatility, as investors digest economic, technological, and geopolitical developments.”

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