Stocks declined early after President Trump's late-Wednesday address vowing continued U.S. attacks on Iran without a clear end to the Middle East conflict (AP News). Oil prices surged but eased slightly, staying elevated above $100/barrel'up from sliding toward $100 pre-address. Wall Street fears added inflation pressure, with U.S. gasoline jumping 36% in a month to $4.08/gallon (AAA), squeezing consumer wallets directly and indirectly.

The U.S. imports only a fraction of its oil from the Persian Gulf but global commodity pricing means disruptions anywhere spike prices everywhere. Stocks have slid broadly since the war began, with the S&P 500 nearing a 10% correction drop before rebounding on hopes of a quick end. A prolonged conflict risks sustained inflation, slower global growth, higher interest rates, and lower equity valuations, per LPL Financial's Adam Turnquist.

Rising fuel costs indirectly inflate services and goods, from airline tickets to shipping-dependent consumer products. With inflation already above the Fed's 2% target, the war dashes rate-cut hopes amid a weakening job market. Traders now expect steady benchmark rates in 2026. An oil market anomaly has U.S. crude futures (May delivery) trading above Brent (June), due to urgent supply constraints.

Airlines and other travel-related companies were among the biggest losers on Thursday. United Airlines fell 3% and Carnival shed 3.5%. Tesla fell 5.4% after a report showing that sales over the past three months fell short of analysts' expectations. Several big technology stocks gained ground to help counter losses elsewhere in the market. Intel jumped 4.9% and Advanced Micro Devices rose 3.5%. Tesla fell 5.4% after a report showing that sales over the past three months fell short of analysts' expectations. Several big technology stocks gained ground to help counter losses elsewhere in the market. Intel jumped 4.9% and Advanced Micro Devices rose 3.5%.

Asia-Pacific markets traded mostly higher Friday, after Iran and Oman were reportedly drafting a protocol to 'monitor transit' through the Strait of Hormuz, raising hopes that the crucial waterway could partially reopen. Japan's Nikkei 225 was up 0.91%, driven by consumer non-cyclical stocks and the broad-based Topix was 0.65% higher, powered by energy stocks. The pan-European Stoxx 600 closed down 0.3%, bouncing back from a heavy dip earlier in the session. Germany's DAX was hardest hit, shedding 0.8%. The FTSE 100, which is more tilted toward oil and gas, held up better with a 0.7% rise over the day.

Treasury yields remained relatively steady in the bond market. The yield on the 10-year Treasury fell to 4.30% from 4.32%. The 10-year Treasury yield ticked up on Wednesday as investors assessed the prospect of a resolution to the conflict in the Middle East. The yield on the 10-year Treasury rose more than 2 bps to 4.33%. The 2-year yield was up less than 2 bps at 3.81% while the 30-year Treasury yield climbed more than 2 bps to 4.91%.