Wall Street marks its worst week since start of conflict in Iran

U.S. stocks deepened their drops Friday as Wall Street finished off a fifth straight losing week, its longest such streak in nearly four years.

The S&P 500 fell 1.7 per cent to close its worst week since the war with Iran began. The Dow Jones Industrial Average lost 793 points, or 1.7 per cent, and fell more than 10 per cent from its record set last month, while the Nasdaq composite sank 2.1 per cent.

The Dow’s loss makes it the latest major index to confirm a correction, commonly defined as a drop ‌of 10 per cent from a prior high. The Dow follows the Nasdaq, which crossed the correction threshold yesterday.

The losses are a break from Wall Street’s pattern this week, when the U.S. stock market flip-flopped from gains to losses each day as hopes rose and fell about a possible end to the war.

In Canada, however, the country’s main stock index finished narrowly in positive territory, helped by gains in the basic materials sector. The S&P/TSX composite index was up 73.13 points at 31,960.65 at close.

Moments after the U.S. stock market finished its dismal Thursday of trading, U.S President Donald Trump offered another potential signal for hope. He extended a self-imposed deadline to “obliterate” Iran’s power plants to April 6 if it doesn’t allow oil tankers to resume their exits from the Persian Gulf to the open ocean through the Strait of Hormuz.

Oil prices pulled back briefly after Trump’s announcement in a sign of hope in financial markets that some normalcy may return to the Strait of Hormuz. But oil prices resumed their climb as the sun moved westward from Asia to Europe and back to Wall Street.

• Cross Country Checkup is asking: What questions do you have about the war in the Middle East? Leave your comment here and we may read it or call you back for Sunday’s show.

Despite Trump’s second announcement of delay this week, fighting continued in the Middle East. Iran gave no signs of backing down, while Israel threatened to “escalate and expand” its attacks on Iran.

“The diplomatic dissonance this week between the U.S. and Iran dismayed investors,” said Doug Beath, global equity strategist at Wells Fargo Investment Institute. “By the end of the week, risk appetite could not withstand the fog of war.”

WATCH | Oil prices keep climbing:

How high could the Iran war take oil prices?

Iran’s blockade of the Strait of Hormuz and attacks on tankers and facilities have pushed oil above $100 US a barrel. Cornell economic historian Nicholas Mulder says it’s ‘reasonable to assume’ prices will keep climbing by a few dollars a day as long as the war continues, potentially topping $120 US by month’s end.

“Any further statements by Trump about a deal are white noise to the markets,” Jim Bianco, president and macro strategist at Bianco Research,…