US close: Stocks slip again as oil prices rise, economic data disappoints

US stocks finished firmly in the red on Friday as investors reacted to another rise in oil prices and digested a barrage of weak domestic economic data.

The Dow fell 0.3%, the S&P 500 slipped 0.6%, while the S&P 500 finished 0.9% lower, with all three settling at their lowest levels since mid-November.

Elevated crude prices remained in focus on Friday, as did renewed inflation concerns, dampening expectations for how far the Federal Reserve might cut interest rates this year.

Brent was 2.7% higher at $103.14, settling above the $100 mark for the second straight day – it has not settled above this mark since Russia began its assault on Ukraine in 2022.

Global energy prices have soared since the US attacked Iran. As hostilities mount across the region, the Strait of Hormuz - a vital passage in the global supply of oil - has become too dangerous to pass. Around a fifth of the world’s supply is normally transported through the narrow waterway between Iran and Saudi Arabia.

As a result, tankers have been left stranded and oil prices have rocketed. The International Energy Agency, which this week released an unprecedented 400m barrels of emergency stockpiles, warned that global crude supplies will hit their lowest level in four years this month.

Economic data mostly disappoints

News that fourth-quarter US economic growth was revised sharply lower made headlines on Friday, as consumer spending and fixed investment growth both slowed, and steep declines were seen in exports and government spending. The second estimate of fourth-quarter real gross domestic product showed an annualised increase of just 0.7% for the final three months of last year, according to the Bureau of Economic Analysis, well below the 1.4% flash estimate. Analysts had widely expected the follow-up numbers to be unchanged, following the 4.4% growth registered in the third quarter.

In other data, orders for US-made durable goods were flat month-on-month in January, according to the Census Bureau, following December's downwardly revised 0.9% decrease and compared to consensus expectations of a 1.2% increase.

Headline PCE growth slowed to 2.8% year-on-year in January, from 2.9% in December. January's reading came in just below expectations. The core PCE index, the Federal Reserve's preferred measure of underlying inflation, accelerated to 3.1% year-on-year, up from 3% in the prior month and still well above the central bank's 2% target.

US consumer sentiment weakened in March, according to a preliminary reading of the University of Michigan's consumer sentiment index, with the headline index slipping to 55.5 from 56.6 in February, though still coming in slightly ahead of expectations of 55. March's print marked the lowest reading in three months, with respondents citing the US–Iran military conflict as a key factor weighing on confidence. Rising gasoline prices had the most immediate impact on households.

In equity news, software giant Adobe was a heavy faller, down 9% on the news that long-time chief executive Shantanu Narayen will step down from the role as the company looks to find a new head to guide it through the artificial intelligence age. Narayen's exit comes as Adobe posted a first-quarter profit of $1.89bn, or $4.60 on a per share basis, up from $1.81bn, or $4.14 per share, in Q125, while revenues rose 12% to a record $6.4bn - ahead of Wall Street expectations of $6.28bn.

Other heavyweights in the tech sector were also lower, including Apple, Amazon.com, Nvidia and Microsoft.