Oil prices rose, gold set a record high, and the U.S. currency rose on Friday as investors worried about geopolitical tensions and possible interest rate differences between Europe and the U.S.
First-quarter earnings season began with gloomy bank reports, sending major U.S. market indices down in early trade. MSCI's global equity index (.MIWD00000PUS) declined 0.7%.
Iranian attacks on Israel are expected, but not large enough to pull Washington into conflict, a U.S. official said late Thursday. Israel did not claim authority for the April 1 airstrike.
There are "concerns that there may be an attack on Israel by Iran," said Invesco chief global market strategist Kristina Hooper. "That has boosted gold and safe-haven currencies. Geopolitical risk drives many moves." An advertisement Scroll to continue.
Also discussed were central bank outlooks. The European Central Bank signaled it could drop rates on Thursday, while a hotter-than-expected inflation figure on Wednesday delayed the Federal Reserve's first cut until later in the year.
"In the near term it is going to be harder for the Fed to cut than for the ECB," said BNP Paribas global head of economics Marcelo Carvalho. At 00:59, S&P and Nasdaq rise rapidly on weak inflation figures.
Wall Street's Dow Jones Industrial Average (.DJI) slid 319.60 points, or 0.83%, to 38,139.48, the S&P 500 (.SPX) sank 43.16 points, or 0.84%, to 5,155.42, and the Nasdaq Composite (.IXIC) fell 167.82 points, or 1.03%, to 16,273.65.
The S&P 500 Banks index (.SPXBK) fell 2.4% as investors digested mixed results from JP Morgan (JPM.N), Citigroup (C.N), and Wells Fargo (WFC.N). index Europe's STOXX 600 climbed 0.29%. The 10-year U.S. note yield decreased 7.5 basis points to 4.501% from 4.576% late Thursday.
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