Oil prices surged on Friday, pushing Brent crude to its highest settlement in nearly six months as Houthi attacks in Saudi Arabia and a reported oil spill in the United Arab Emirates fuelled concerns over potential supply disruptions in the Middle East.
Brent crude futures climbed $3.55, or 3.14%, to settle at $116.72 a barrel, their highest close since April 29. US West Texas Intermediate crude rose $3.80, or 3.8%, to finish at $103.27 a barrel.
Brent advanced 6% over the week, outpacing WTI's 2.3% gain as traders weighed mounting regional risks to energy supplies. The attacks in Saudi Arabia fuelled concerns about the security of regional energy infrastructure and the potential impact on oil flows.
The UAE also reported an oil spill, adding to market concerns over supply risks in a region central to global energy markets. The rally lifted Wall Street's energy sector by 2.5% on Friday, taking it to a record high, even as major US stock indexes ended lower.
The Dow Jones Industrial Average fell 652.82 points, or 1.23%, to 52,215.16. The S&P 500 lost 39.75 points, or 0.52%, to 7,623.68, while the Nasdaq Composite slipped 53.52 points, or 0.21%, to 25,955.34.
For the week, the S&P 500 fell 0.5%, and the Nasdaq dropped 0.7%. The Dow, however, gained 0.4%, extending its weekly winning streak to three weeks.
The broader market decline came as investors continued to assess the outlook for technology stocks and the sustainability of heavy spending on artificial intelligence. Semiconductor shares recovered slightly, with the Philadelphia Semiconductor Index rising 0.4%, after recording its biggest daily percentage drop since June on Thursday.
The S&P 500 technology index also gained 0.4%. However, gains were uneven across major technology companies.
Meta Platforms shares fell 1%, while Microsoft rose 0.7%. Alphabet and Amazon shares edged lower.
Investor concerns over the AI trade resurfaced after a report from Meta reignited questions about the returns on substantial investments in artificial intelligence. The focus is now shifting to next week's earnings reports from major companies, including Alphabet, Microsoft and Amazon.
Together with other large technology firms, their spending plans are expected to remain a key concern for investors. "There's still anxiety over the AI trade to a certain extent," said Art Hogan, chief market strategist at B.
Riley Wealth in Boston.