Wall Street closed lower as escalating U.S.-Iran tensions drove oil prices to six-month highs, sparking supply fears and investor unease. The S&P 500 fell 0.28% to 6,861.90, the Dow dropped 267 points or 0.54% to 49,395.16, and the Nasdaq declined 0.31% to 22,682.73 . Energy stocks bucked the trend with gains amid the crude rally.

Oil Prices Spike on Strait of Hormuz Concerns

Brent crude surged past $71 per barrel Thursday, hitting a 6.5-month high, while West Texas Intermediate topped $66; by Friday Asian trading, Brent exceeded $72 . The rally accelerated after Vice President JD Vance noted Iran's failure to meet U.S. demands in Geneva nuclear talks, hinting at potential escalation . President Donald Trump, speaking at his Board of Peace launch, warned Iran must deal or face "bad things" within 10 days.

Iran's Revolutionary Guard ran live-fire drills and briefly shut the Strait of Hormuz, through which 20% of global oil flows, amplifying supply disruption worries . Analysts at ANZ highlighted risks to shipping in the strait as the core oil market concern.

Massive U.S. Military Buildup Fuels Anxiety

The U.S. staged its biggest Middle East buildup since 2003, deploying the USS Abraham Lincoln carrier group since late January and sending the USS Gerald R. Ford with destroyers through the mid-Atlantic. Over 50 fighter jets, including F-22s, F-35s, and F-16s, moved to the region recently . These moves deepened market jitters over possible conflict.

Private Credit Sector Adds Downward Pressure.

Fresh private credit woes compounded the sell-off, with Blue Owl Capital shares dropping nearly 6% after halting redemptions on a retail fund and selling $1.4 billion in loans . This hit peers like Blackstone, Ares Management, and Apollo Global Management . Spectra Markets' Brent Donnelly called it a "prudent day to avoid trouble" amid weekend Middle East uncertainty