U.S. stocks fall from records as higher oil prices lift bond yields and rates outlook

U.S. stocks fell from record highs on Friday and joined a broad worldwide decline after higher oil prices pushed bond yields higher, raising concerns about inflation and borrowing costs. The S&P 500 dropped 1.2% from its all-time high the prior session, the Dow Jones Industrial Average fell 1.1%, and the Nasdaq composite sank 1.5%, with technology and artificial intelligence-related shares leading the pullback.

The move reflected a turnaround in a market that has been lifted by strong corporate results and heavy investor demand for AI-linked companies. Nvidia, long viewed as a bellwether for the AI boom, slid 4.4% and was the largest weight on the S&P 500. Micron Technology fell 6.6% and also dragged on major indexes, as investors recalibrated after a period of sharp gains.

Analysts attributed the sudden risk-off shift in part to rising energy prices and their effect on expectations for interest rates. Brent crude, an international benchmark, rose 3.3% to settle at $109.26 a barrel, significantly above its level of roughly $70 before the conflict in the Middle East intensified. Reporting in the U.S. pointed to the war with Iran continuing and the Strait of Hormuz remaining shut...