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Wall Street closed lower on Friday as Middle East tensions escalated and markets grappled with concerns over oil price volatility and its inflationary implications. The S&P 500 fell 0.4% amid a fourth consecutive session of declines, driven by geopolitical risks and renewed worries about energy costs. Rising conflicts in the Middle East triggered a spike in crude oil prices, which traders fear could reignite inflationary pressures and delay central bank easing cycles. The retreat in US equities reflects investor anxiety over potential supply chain disruptions and higher energy costs. Oil markets are closely monitored as a key inflation indicator, with rising prices threatening to undermine progress on disinflation. Traders are now assessing whether the Federal Reserve will maintain a hawkish stance amid these developments, impacting broader market sentiment. For Gulf and MENA investors, the situation highlights the dual-edged nature of oil price movements—benefiting energy-dependent economies but increasing input costs for industries. Key watchpoints include OPEC+ policy decisions, U.S. inflation data, and regional geopolitical developments. The interplay between oil prices and global monetary policy will likely dominate market discussions in the coming weeks.
