The Dow entered correction territory on Friday as oil prices jumped above $110 a barrel and President Trump’s extended deadline for Iran to open the vital Strait of Hormuz failed to calm investors.

The Dow Jones Industrial Average tumbled nearly 800 points, or 1.7%, to 45.166.64, while the S&P 500 and Nasdaq fell 1.7% and 2.2%, respectively.

The trend put the Dow 10% below its February high of 50,512 — a decline known as a market correction.

The Nasdaq fell into a correction on Thursday, dropping over 10% from its October peak. The S&P 500 is about 7% below its record, as investors fear a prolonged conflict in the Middle East. All three indexes notched their fifth straight week of losses, the longest losing streak since May 2022.

Brent crude prices jumped 4.2% Friday to settle at $112.57 a barrel, while West Texas Intermediate crude rose 5.5% to $99.64 as Iran maintained its blockade of the strait, a key maritime route for 20% of the world’s oil – and other key goods like fertilizer and metals. Both benchmarks settled at 52-week highs.

On Thursday, Trump extended a deadline on Iran to open the strait or face attacks on its power plants to April 6 — an extra 10 days from the original deadline that was set to expire on Friday.

“As per Iranian government request, please let this statement serve to represent that I am pausing the period of Energy Plant destruction by 10 Days to Monday, April 6, 2026, at 8 P.M., Eastern Time,” Trump wrote in a Truth Social post.

“Talks are ongoing and, despite erroneous statements to the contrary by the Fake News Media, and others, they are going very well,” he continued.

Oil prices have continued to move higher, and analysts have warned that Iranian attacks on energy facilities in Saudi Arabia and an LNG plant in Qatar could keep energy prices elevated even if the war ends soon, since it will take time to repair damages.

Americans are already shelling out more for gasoline at pumps – with the national average hitting $3.98 a gallon Friday, per AAA – and farmers are struggling to survive a “double whammy” effect on prices from tariffs and fertilizer shortages.

As of Friday, traders now see a 52% chance that the Fed will hike interest rates by the end of 2026 — the first time those odds have moved above 50%, according to CME FedWatch.

“The stock market is still highly correlated to oil prices, so as oil prices move higher, stocks are moving lower. It’s that simple of an explanation for right now,” Glen Smith, chief investment officer for GDS Wealth Management, wrote in a note Friday.

“The speed of the market’s declines in recent weeks and the fact that most of this fear has been driven by a single narrative, geopolitical tensions, suggests that the market is in the midst of a correction, and not a bear market.”

Investors have also faced conflicting reports on peace talks, with Iranian state media reporting that the regime has rejected a 15-point ceasefire plan from the Trump administration and has no plans to hold talks with the US. 

President Trump, however, insisted during a Cabinet meeting Thursday that the US has “very substantial talks going on with respect to Iran,” after tweeting earlier in the day that Tehran’s negotiators “better get serious soon, before it is too late.”

During that same meeting, Trump announced that Iran has let 10 oil tankers move through the strait this week as a “present” to the US.

But the Department of War is reportedly gearing up to send thousands of troops to the Middle East, just days after dispatching roughly 2,500 Marines aboard warships to the region.

It is unclear whether the deployment represents an escalation, or if their presence is meant to serve as a deterrent against further Iranian attacks.