By Panos Mourdoukoutas

U.S. stocks declined for a fifth consecutive week, marking the longest losing streak since 2022, as higher oil prices, elevated Treasury yields, and renewed concerns about the disruptive impact of artificial intelligence (AI) on the technology sector reduced investor appetite for risk assets. Both the Dow Jones Industrial Average and the Nasdaq Composite fell into correction territory—about 10 percent below their recent peaks.

For the week, the Dow fell by 0.90 percent to 45,166, ending at its weekly low. The S&P 500 dropped by 2.12 percent to 6,368, also closing near the low of the week. The Nasdaq suffered the steepest loss, falling by 3.23 percent, while the Russell 2000 managed a modest 0.42 percent gain.

Market volatility eased earlier in the week but spiked toward the end. The Chicago Board Options Exchange Volatility Index closed at 31.05, up by 15.94 percent for the week.

Stocks opened the week with a relief rally on March 23 amid hopes for a pause in the U.S.–Israel conflict with Iran, which triggered a sell-off in the oil market. U.S. oil prices fell sharply, with West Texas Intermediate crude oil futures plunging by more than 10 percent to around $87 per barrel.

Despite surrendering some earlier gains, all major indexes finished the day firmly in positive territory, led by the Russell 2000, which rose by 2.29 percent. The Nasdaq and the Dow advanced by 1.38 percent each, while the S&P 500 gained by 1.15 percent.

Clark Bellin, president and chief investment officer of Lincoln, Nebraska-based Bellwether Wealth, told The Epoch Times that while uncertainty remains over how long the conflict and elevated oil prices will persist, markets may have already priced in much of the risk.

“While higher energy prices may hurt consumer spending and lower economic growth, we remind investors that stocks move ahead of the economy. If the economy is going to suffer from high oil prices, stocks will have likely already recovered from this negative by the time it shows up in the economic data,” he said.

Stocks reversed course on the morning of March 24 as oil prices and bond yields resumed their rise, reducing investor appetite for risk assets. All major averages opened sharply lower but trimmed losses later in the day on hopes the United States and Iran could reach an agreement on a cease-fire.

The Dow, S&P 500, and Nasdaq closed lower, falling by 0.37 percent, 0.18 percent, and 0.84 percent, respectively, while the Russell 2000 posted a slight gain of 0.45 percent.

Investor anxiety was also fueled by news that another private credit management fund, Apollo Group, had limited withdrawals from its private credit fund, weighing on financial shares, though losses eased by the close.

Concerns about AI’s disruptive impact on the software sector resurfaced after reports that Amazon was using AI to develop its own software tools. Shares of Microsoft, Salesforce.com, and Workday fell sharply, declining by 2.73 percent, 6.24 percent, and 5.67 percent, respectively, for the day.

Some companies tied to higher energy prices posted gains. Coal miner Peabody Energy Corporation rose by nearly 8 percent, Core Natural Resources gained by 6.33 percent, and Alliance Resources advanced by 2.68 percent.

The relief rally resumed on the morning of March 25, supported by lower oil prices and declining yields, with all major equity averages posting gains.

The rally lost some momentum in the afternoon as oil prices rebounded, but buyers maintained the advantage through the close. The Russell 2000 and the Nasdaq led the gains, rising by 1.23 percent and 0.77 percent, respectively. The Dow and the S&P 500 added 0.66 percent and 0.54 percent, respectively.

Among the day’s biggest gainers were semiconductor stocks.

Arm Holdings plc rose by 16 percent following the release of its first data center chip, while Intel and AMD each gained by about 7 percent after announcing price increases for their chips.

“The stock market is in a holding pattern as it waits for the next shoe to drop in the Iran conflict, and it’s clear that investors are not yet willing to bet on which direction this conflict may go in next. That’s why we expect stocks to remain sideways as the market reads the tea leaves and prices in what’s next,” Paul Stanley, chief investment officer of Portsmouth, New Hampshire-based Granite Bay Wealth Management, told The Epoch Times.

Markets broke out of that holding pattern on the morning of March 26, with equities opening sharply lower as oil prices and bond yields reversed direction again amid doubts about a quick resolution to the war in Iran.

Persistently high oil prices and the ongoing conflict are expected to push inflation higher. The Organization for Economic Cooperation and Development (OECD) forecast U.S. headline inflation to reach 4.2 percent in 2026, well above the Federal Reserve’s 2 percent target, which could add further pressure on bond yields and weigh on equities.

At the same time, the OECD expects higher oil prices to slow U.S. economic growth to about 2.1 percent this year, below its long-term potential of 2.5 percent.

Technology stocks faced additional pressure after a recent court ruling that could leave social media platforms liable for user-posted content.

Selling accelerated in the afternoon, with the Nasdaq dropping by 2.38 percent for the day and about 10 percent below its Feb. 8 peak, putting it into correction territory. The Russell 2000, the S&P 500, and the Dow also posted sizable losses of 1.70 percent, 1.74 percent, and 1.01 percent, respectively.

The sell-off continued into March 27, the final trading day of the week, as oil prices and bond yields rose more, with the 10-year Treasury yield approaching the key 4.5 percent psychological level.

Technology shares were hit hard as investors grew increasingly concerned about valuations, legal risks, and the disruptive effects of AI. The Nasdaq fell by 2.15 percent, deeper into correction territory.

Small-cap stocks also declined sharply amid concerns that higher oil prices and borrowing costs could push the economy toward recession, with the Russell 2000 down by 1.86 percent.

The Dow and the S&P 500 fell by 1.73 percent and 1.67 percent, respectively. The Dow dropped by 793 points on the market close, putting it just more than 10 percent below its Feb. 10 peak.

“The stock market is still highly correlated to oil prices, so as oil prices move higher, stocks are moving lower. It’s that simple an explanation for right now,” Glen Smith, chief investment officer at Flower Mound, Texas-based GDS Wealth Management, told The Epoch Times.

“It is not surprising that the Nasdaq entered correction territory before the broader S&P 500, as technology stocks had already been under pressure before the Iran conflict began, amid concerns about high valuations and questions about the return on investment in AI,” he said.

“Corrections between 5 to 10 percent, like the one we’re in the midst of now, are extremely common in markets, and it’s actually abnormal to not have them.”