Dow Jones Falls 547 Points as Brent Tops $115 in Early Trading
Key Facts
The Dow Jones Industrial Average fell 547 points, or 1%, in early trading on Friday, October 23, as oil rose and pressure on technology stocks resumed, according to the Associated Press. The move followed Thursday’s session, when the index closed up 11.89 points, or less than 0.1%, at 52,867.98. Its modest gain on Thursday contrasted with larger losses in the other two indexes, with the S&P 500 down 1.2% and the Nasdaq Composite down 2.6%. The agency said the technology selloff obscured gains elsewhere in the market, as most U.S. stocks rose on Thursday. In early trading Friday, the S&P 500 fell 0.5% and the Nasdaq 0.4%, while Meta shares dropped 2.1%.
Oil was another source of pressure on the market. Brent crude rose 1.8% to just over $115 a barrel in early trading Friday, its highest level since March, according to the Associated Press. Prices had climbed 4% on Thursday after remaining below $97 a barrel at the start of October. The agency linked crude’s rise to uncertainty over when the global energy sector would return to normal amid the war with Iran. Higher energy costs also fed through to U.S. fuel prices: the average price of a gallon of regular gasoline stood at $4.29 on Friday, up two cents from the previous day. The average was $3.07 a gallon a year earlier, according to American Automobile Association data cited by the agency. The increases put energy costs among the leading concerns markets are monitoring as the Federal Reserve meeting and price data approach.
Alongside oil, concerns about financing the artificial intelligence boom continued to weigh on sector stocks. The Associated Press said investors are worried that higher borrowing costs could threaten companies’ expansion, as they need financing to build data centers and buy more AI chips. Meta stood out in this context after its shares closed down 7% on Thursday, then fell 2.1% in early trading Friday. The company, which owns Facebook and Instagram, announced the creation of a new class of shares to raise money for AI investments and other expenses. The announcement coincided with the share decline, while concern over borrowing costs remained a separate factor from rising oil in weighing on technology companies. The performance of technology shares obscured broader gains elsewhere in the U.S. market during Thursday’s session.
U.S. futures fell ahead of Friday’s open, with S&P 500 futures down 0.3% and Dow Jones futures down 0.6%, according to the Associated Press. In Europe, Germany’s DAX fell 0.8% in early trading, France’s CAC 40 declined 0.7% and Britain’s FTSE 100 dropped 0.5%. The moves came amid broader weakness in equity markets at the start of the day, while the Dow Jones had ended Thursday with a weekly gain of 865.57 points, or 1.7%, through the close. The comparison shows that early trading losses had not erased the index’s gains for the week up to that point. Losses in U.S. indexes on Thursday were also uneven: the Nasdaq fell the most, while most U.S. stocks outside the technology drag rose.
Attention now turns to the Federal Open Market Committee meeting on October 27 and 28, according to the Federal Reserve calendar, with a press conference scheduled for October 28. The next day, October 29, personal income and outlays data for September are due, including the personal consumption expenditures price index, according to the U.S. Bureau of Economic Analysis schedule. The dates follow Brent crude’s rise to more than $115 a barrel in early trading, as investors monitor the impact of energy on prices and borrowing costs on AI investments. September’s data will also provide a fresh gauge of prices and spending before the end of the month. These events put monetary policy and inflation data at the center of market attention after the early decline in stocks.