Dow Drops 700 Points as Oil Climbs to Five-Month High

Wall Street opened Friday under pressure as crude oil surged to its highest level since early May and investors grew uneasy about both Middle East tensions and the scale of Big Tech’s AI spending.

By about 10:40 a.m. ET, the Dow Jones Industrial Average had fallen 702 points, or 1.3%. The S&P 500 slid 0.4%. The Nasdaq traded roughly flat after suffering its worst day since June on Thursday.

Oil was the main driver. Brent crude futures rose 2.7% to $116.24 a barrel, their highest level since early May, and were on track for a weekly gain of more than 10%. West Texas Intermediate climbed 2.9% to $102.40. At the pump, the national average hit $4.29 a gallon, according to AAA.

The New York Post reported that investors are bracing for renewed fighting in the Middle East. Reports indicate the U.S. has drawn up plans for fresh strikes after the midterm elections and has ordered non-emergency personnel and their families to leave Saudi Arabia. The New York Times separately reported that U.S. and Israeli officials are weighing a “short but intensive” operation in Iran once the elections are over. These accounts are based on reports, not official announcements.

The rhetoric from both sides sharpened this week. President Trump accused Iran on Thursday of lying about attacks on ships crossing the Strait of Hormuz. In a Truth Social post, he claimed Tehran “is doing everything they can to drive up the price of Oil prior to the US Midterm Election.” He added that Iran is inventing “fake hits, mines, and everything else,” arguing that more oil is moving through the strait now than before the conflict began.

Iran’s account differs. According to a state-backed news agency, the Islamic Revolution Guards Corps said Thursday that four vessels were struck and caught fire in the Gulf, while three more hit mines in the strait. Iran’s army chief also reportedly said the military is fully prepared for “asymmetric warfare” and has expanded its capabilities. The competing claims have not been independently reconciled in the source reporting.

A second worry is weighing on the tape: whether tech giants are overspending on artificial intelligence. A persistent sell-off in the sector follows major companies’ disclosure of enormous spending plans, and interest rates remain stubbornly high.

CoreWeave, an AI cloud provider that rents out computing capacity, slipped 0.9% Friday after plunging more than 10% the day before. The so-called “neocloud” has become a bellwether for companies spending heavily now in hopes of AI-related revenue later. Other chip names bounced modestly Friday morning. AMD rose 1.9%, Micron gained 3.5% and Nvidia edged up 0.5%.

In the bond market, the 10-year Treasury yield ticked up to 4.994%, and the 30-year yield rose to 5.317%. Both had fallen sharply on Thursday.

For New York businesses, the combination matters. Higher fuel costs ripple through delivery, logistics and hospitality margins, while a shaky tech tape and elevated long-term yields complicate financing and valuations heading into the final stretch before the midterms.