The US stock market is experiencing a significant decline from its record highs on Friday, joining a worldwide drop for stocks in wake of higher oil prices. The S&P 500 fell 1.1% from the all-time high it set the previous day.

The Dow Jones Industrial Average fell 408 points, or 0.8% as of 9:35 a.m., Eastern time. Meanwhile, rising oil prices are increasing the pressure after driving inflation past expectations. 

As the war with Iran continues, the Strait of Hormuz remains blocked to oil tankers, cutting off global supply and forcing crude prices higher. For those unversed, the price for a barrel of Brent crude oil rose 2.1% to $107.97, up from its pre-war level of approximately $70.

Tensions were most apparent on Friday in the bond market, where Treasury yields jumped sharply. The yield on the 10-year Treasury rose to 4.56% from 4.47% late Thursday. 

This marks a significant yield fluctuation for the bond market, which yields holding well above the 3.97% level seen before the war. Concerning the situation, traders have abandoned all hopes that the Federal will cut interest rates this year.

Jacobsen, chief economic strategist at Annex Wealth Management said: “The strong corporate profits and durable US economy that launched US stocks to records remain intact, but the path is unlikely to smooth.”

South Korea’s Kospi dropped 6.1% marking one of the markets' moves. The index has been shattering records this year due to the massive surge in AI stakeholders like SK Hynix. 

On Friday, it immediately changed momentum after briefly crossing the 8, 000 level for the first time.

“If nothing else this should be a shot across the bow for how volatility works both ways, according to Jonathan Krinsky, chief market technician at BTIG.”