Wall Street closed out a turbulent week on a sour note Friday, with all three major indexes posting sharp declines that erased much of the gains built up through a historic midweek rally, leaving investors to weigh record stock prices against rising inflation, elevated oil prices, and unresolved geopolitical tensions.
For the week, the S&P 500 and Nasdaq Composite each finished up roughly 0.3 percent, while the Dow Jones Industrial Average ended nearly flat, down just 0.05 percent. The modest weekly gains obscured a dramatic swing in sentiment that saw indexes hit all-time highs Thursday before reversing course.
Thursday was the week’s standout session. The Dow popped more than 370 points to close at 50,063, reclaiming the 50,000 level, while the S&P 500 climbed to 7,501 and the Nasdaq gained 0.88 percent, with all three posting record closes. The rally was driven by a strong earnings report from Cisco Systems, whose shares surged 13 percent, and optimism surrounding a two-day summit between President Donald Trump and Chinese President Xi Jinping in Beijing.
Trump and Xi met for more than two hours at the opening of the summit, with Xi warning that mishandling Taiwan could cause clashes that would put the entire relationship in jeopardy. Trump also discussed the ongoing conflict with Iran and the blockade of the Strait of Hormuz during the talks.
The summit ultimately disappointed investors looking for concrete results. Trump departed China after two days of talks accompanied by 16 top U.S. executives, touting what he called fantastic trade deals, though no major agreements or breakthroughs were announced before he left Beijing. Trump said China had agreed to purchase 200 Boeing aircraft equipped with GE Aerospace engines, though the announcement fell short of the 500-plane deal many had anticipated.
Friday’s selloff reflected that disappointment and broader anxiety about inflation. The S&P 500 shed 1.24 percent to close at 7,408, while the Nasdaq fell 1.54 percent and the Dow lost 537 points to settle at 49,526. Technology stocks led the decline, with Intel retreating more than 6 percent, Advanced Micro Devices and Micron Technology both losing more than 5 percent, and Nvidia dropping 4.4 percent.
The week’s inflation data gave investors little comfort. Import prices jumped 1.9 percent for the month, a full percentage point above March’s increase and well above forecasts, driven largely by a 16.3 percent surge in fuel and lubricant prices and a 19 percent jump in petroleum products. The energy price spike is tied directly to the ongoing conflict with Iran, which has disrupted shipping through the Strait of Hormuz, one of the world’s most critical oil transit routes.
Oil analyst Dan Niles, founder of Niles Investment Management, warned Friday on CNBC that the oil price surge is becoming a serious concern, noting that ten of the last twelve recessions were preceded by a spike in oil prices and that the Federal Reserve’s ability to cut rates could be hampered by energy-driven inflation.
Despite the week’s volatility, AI-related stocks remained a central driver of market performance. Technology and semiconductor firms continued to attract buying interest on expectations that AI-driven demand will remain strong throughout 2026. Investors are now looking ahead to Nvidia’s first-quarter earnings report, due next Wednesday, as the next major test of that thesis.