S&P suffers worst week since October

Middle East worries, concerns about earnings weigh on stocks

NEW YORK — U.S. stocks tumbled Friday after a mixed start to earnings reporting season. Worries about potentially escalating tensions in the Middle East rattled financial markets, pushing investors to look for safer places for their money.

The S&P 500 sank 1.5 percent to close out its worst week since October, when a huge rally on Wall Street began.

The Dow Jones Industrial Average dropped 475 points, or 1.2 percent, and the Nasdaq composite fell 1.6 percent from its record set the day before.

Jpmorgan Chase was one of the heaviest weights on the market and sank 6.5 percent despite reporting stronger profit for the first three months of the year than analysts expected. The nation’s largest bank gave a forecast for a key source of income this year that fell below Wall Street’s estimate, calling for only modest growth.

A stream of reports this year has shown both inflation and the overall economy remain hotter than expected. That has forced traders to scale back forecasts for how many times the Federal Reserve may cut its main interest rate this year.

Traders are largely betting on just two cuts, according to data from CME Group, down from forecasts for at least six.

U.S. stock indexes had run to records in part on expectations for such cuts. Without easier interest rates, companies will need to produce bigger profits to justify their stock prices, which critics say look too expensive.

This year’s jump in oil prices has further raised worries of more upward pressure on inflation.

Oil rose again Friday as tensions continue to roil the Middle East. Israel has said it could strike Iran if it launched an attack from its territory following the killings of Iranian generals in a blast at the Iranian Consulate in Syria.

Brent crude, the international standard, rose

0.8 percent to settle at $90.45 per barrel. It briefly topped $92 during the day and is roughly back to where it was in October.

At the same time, Treasury yields in the bond market sank and the price of gold rose, which is typical when investors are herding into investments seen as safer.

The yield on the 10-year Treasury fell to 4.51 percent from 4.58 percent late Thursday. Gold, which has been setting records, got close to touching $2,450 per ounce for the first time before paring its gain.