Stock market today: Wall Street is heading for its worst week since October as oil prices rise

NEW YORK (`) — U.S. stocks fall sharply Friday after a Mixed winning start reporting season. Concerns about tensions in the Middle East also rattled financial markets, prompting investors to look for safer places to put their money.

The S&P 500 was down 1.6% in afternoon trading, heading for its worst weekly loss since Wall Street's massive rally began in late October. The Dow Jones Industrial Average fell 530 points, or 1.4%, with just over an hour of trading remaining, and the Nasdaq Composite fell 1.8% from its record set the previous day.

JPMorgan Chase fell 5.7% and was one of the market's heaviest weights despite reporting higher profits than analysts expected in the first three months of the year. The country's largest bank gave a forecast for a key source of revenue this year that was below Wall Street's estimate and predicted only modest growth.

There is always pressure on companies to generate higher profits. However, this is particularly acute now amid fears that the other key lever driving stock prices, interest rates, may not provide much of a boost in the near term.

A Electricity from Reports This year has shown both inflation and the whole thing Business stay hotter than expected. This has forced traders to lower their forecasts by a lot, by a lot reduce its key interest rate this year. Traders are largely betting on just two, fewer than forecast, according to data from CME Group at least six at the beginning of the year.

Share prices had already risen to record levels partly due to expectations of such cuts. Without cheaper interest rates, companies will have to generate higher profits to justify their stock prices, which critics say are already too expensive in many ways.

The rise in oil prices this year has further fueled concerns as it could put even more pressure on inflation. They rose again on Friday as tensions in the Middle East continue to rock. Israel said it could hit Iran when it launched an attack from its territory after the assassination of Iranian generals in a year Explosion at the Iranian consulate in Syria.

Brent crude, the international standard, rose 0.8% to $90.45. At the beginning of the day, the price briefly exceeded the $92 mark and is roughly back to October levels.

At the same time, Treasury yields in the bond market fell and gold prices rose, which is typical when investors focus on investments that are considered safer.

The yield on the 10-year Treasury note fell to 4.50% from 4.58%. Record-setting gold rose to nearly $2,450 an ounce before giving back its gains.

Adding to the jitters was a preliminary report that suggested sentiment among U.S. consumers was declining. This is an important update because U.S. consumer spending is the main driver of the economy.

Perhaps even more worrisome was that U.S. consumers are becoming increasingly pessimistic about inflation. Their forecasts for inflation over the next 12 months reached their highest level since December. Such expectations could trigger a self-fulfilling prophecy in which purchases designed to outpace higher prices only fuel inflation further.

This is why corporate profits are so closely scrutinized. While the downside of a remarkably resilient U.S. economy is that interest rate cuts are less likely, the upside is that this should help support companies' sales and profits.

According to David Lefkowitz, head of U.S. equities at UBS Global Wealth Management, this has helped profit growth expand to more types of companies, not just the Big Tech giants that dominated the market last year.

Because of that, he predicts the S&P 500 could end the year around the 5,200 level, around where it closed on Thursday. He says the index could potentially even rise to 5,500 if inflation pressures ease more quickly or corporate earnings growth turns out to be stronger than expected.

On Wall Street, Wells Fargo slipped 0.7% after swinging between gains and losses. It beat analysts' profit targets for the latest quarter in its first report since the Biden administration eased some restrictions on the bank following a series of scandals. But net interest income, a key component of bank profits, fell short of forecasts.

Citigroup fell 2.1%, although the stock also reported better-than-expected results, while State Street rose 0.6%.

According to FactSet, banks are entering a reporting season in which analysts are forecasting a third consecutive quarter of growth for S&P 500 companies.

Next week will see reports from such big names as Bank of America, Johnson & Johnson and UnitedHealth Group.

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` writers Matt Ott and Zimo Zhong contributed.