US Stocks Slip as Oil Surges Toward $100 Ahead of Fed Meeting

U.S. stocks edged lower Friday afternoon as rising oil prices and escalating geopolitical tensions in the Middle East kept investors cautious ahead of next week’s Federal Reserve policy meeting.

The Dow Jones Industrial Average closed at 46,558.5, down 119.38 points (0.26%), while the S&P 500 fell 40.43 points (0.61%) to 6,632.19 and the Nasdaq Composite dropped 206.62 points (0.93%) to 22,105.4, according to market data shown in the screenshots.

Energy markets remained the central driver of sentiment. April crude oil futures climbed 3.09% to $98.69, approaching the psychologically important $100 level as supply risks tied to the U.S.–Israeli conflict with Iran continued to ripple through global markets.

Research from Horizon Investments shows volatility in oil markets has surged sharply. The Cboe Crude Oil ETF Volatility Index (OVX) recently jumped to 108, roughly triple its level at the start of the year, signaling large expected swings in crude prices.

The spike reflects fears that the conflict could disrupt a substantial portion of global energy flows. The Persian Gulf region accounts for roughly 20% of the world’s oil supply, and the war has raised concerns that shipments through the region could be curtailed, Horizon researchers said.

Oil prices have already surged dramatically this year. Futures are up more than 50% year-to-date, while gasoline prices have climbed about 25%, reflecting tightening supply conditions and elevated geopolitical risk.

Despite the sharp moves in energy markets, the pullback in U.S. equities has been relatively modest. Analysts like Jay Hatfield, the CEO of Infrastructure Capital, note that the U.S. economy is less vulnerable to Middle East supply disruptions than many overseas markets because the country is now a net exporter of energy, helping cushion the broader equity market.

Investors are also positioning ahead of next week’s Federal Reserve meeting, where policymakers will provide updated guidance on interest rates. With oil prices climbing and geopolitical tensions rising, traders are watching closely for any signs that energy-driven inflation pressures could complicate the central bank’s policy outlook.