05/18/2026
The S&P 500 Index ($SPX) (SPY) on Friday closed down -1.24%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -1.07%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -1.54%. June E-mini S&P futures (ESM26) fell -1.26%, and June E-mini Nasdaq futures (NQM26) fell -1.56%.
Stock indexes sold off sharply on Friday, weighed down by a broad selloff in global bond markets amid soaring crude oil prices that are fueling inflation fears. Doubts over whether oil supplies from the Middle East will normalize anytime soon pushed WTI to a 1.5-week high on Friday, as peace talks between the US and Iran remain in limbo and the Strait of Hormuz remains closed. The soaring crude prices sent bond yields spiking globally, with the Japanese 10-year JGB bond yield jumping to a 29-year high, the 10-year UK Gilt yield surging to an 18-year high, the 10-year German bund yield rising to a 15-year high, and the 10-year T-note yield climbing to an 11.75-month high of 4.60%.
Stock indexes extended their losses on Friday after bond yields climbed further on hawkish US economic news that showed the May Empire manufacturing survey general business conditions unexpectedly rose +8.6 to a 4-year high of 19.6, stronger than expectations of a decline to 7.2. Also, Apr manufacturing production rose by +0.6% m/m, stronger than expectations of +0.2% m/m and the largest increase in 14 months.
WTI crude oil prices (CLM26) surged more than +4% on Friday to a 1.5-week high as talks to end the Iran war remain in limbo. The Strait of Hormuz remains essentially closed, as about a fifth of the world’s oil and liquefied natural gas transits through the strait. On Wednesday, the International Energy Agency (IEA) said in a monthly report that global oil inventories declined at a rate of about 4 million bpd in March and April, and the market will remain “severely undersupplied” until October even if the conflict ends next month. Goldman Sachs estimates that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, with the drawdown potentially reaching 1 billion bbl by June.
The markets are discounting a 3% chance of a -25 bp FOMC rate cut at the next FOMC meeting on June 16-17.
US Stock Movers; Chipmakers sold off on Friday, giving back some of this week’s rally that pushed the S&P 500 and Nasdaq 100 to new record highs. ARM Holdings Plc (ARM) closed down by more than -8% to lead losers in the Nasdaq 100, and Intel (INTC) closed down more than -6%. Also, Micron Technology (MU) closed down more than -5%, and Lam Research (LRCX), Advanced Micro Devices (AMD), ASML Holding NV (ASML), Nvidia (NVDA), and KLA Corp (KLAC) closed down more than -4%.
