Wall Street ended the week lower as a conflict in the Middle East erupted after Iranian Supreme Leader Ayatollah Ali Khamenei was killed, triggering war escalations and uncertainty within oil supply chains.
The S&P (SP500) lost 2.0%, while the tech-heavy Nasdaq Composite (COMP:IND) dipped 1.2%, and the blue-chip Dow (DJI) fell 3.0%.
Financials extended losses for the second straight week. The State Street Financial Sel Sec SPDR ETF (XLF) was down 1.67% from the prior week to $50.57.
The Middle East conflict adds to concerns around consumer confidence. Investors were already anxious over the potential impact of AI on the labor force and credit quality in lending to non-depository financial institutions, S&P Global Market Intelligence reported, citing Piper Sandler analyst Scott Siefers.
Last week, HSBC Holdings (HSBC) stood out as a clear winner among the megacap stocks. However, this week the stock recorded the largest loss in the category.
HSBC fell 9.78% week-over-week to $84.05.
This week, bank stocks largely underperformed as the Middle East war clouded an already uncertain economic outlook, according to a note by S&P Global Market Intelligence.
The war disrupted the flow of oil through the Strait of Hormuz and caused a spike in oil prices, the report noted.
Large banks followed in the list, with Goldman Sachs Group (GS) pulling back by 4.44% to $821.42, Morgan Stanley (MS) down 3.75% W/W to $160.27, and JPMorgan Chase (JPM) falling 3.60% to $289.48.
Goldman Sachs CEO David Solomon said in a speech at a business summit on Wednesday that he was surprised at the “benign” reaction in financial markets over the conflict in the Middle East, and it may take a “couple of weeks” for investors to more fully digest the impacts, Reuters reported.
Notably, Morgan Stanley was said to be eliminating roughly 3% of its global workforce, or about 2,500 jobs.
Among largecap stocks, Rocket Companies (RKT) topped the losers, shedding 17.81% of its value to end at $14.95.
The stock slumped after Better.com (BETR) partnered with OpenAI (OPENAI) to launch a conversational credit decision engine in ChatGPT.
The decision app for mortgages and home equity loans connects users with Better’s Tinman engine directly in ChatGPT, allowing lending teams to approve more loans faster.
“Big mortgage aggregators in the broker and correspondent channel charge what is essentially a 1%-2% tax on each loan just to underwrite a mortgage and deliver it to an institutional investor. That ends now,” said Leah Price, general manager of the Tinman AI Platform.
Japanese banking giant Nomura Holdings (NMR) was the second-biggest loser of the week, having retreated 14.56% to close at $7.69. Japan’s stock market was significantly hit by the volatility stemming from the Middle East conflict, Reuters had noted.
On a surprise note, Circle Internet Group (CRCL) (+22.14% to $101.91) and Coinbase Global (COIN) (+12.15% to $197.22) topped the gainers in the category.
Crypto stocks saw a volatile week as the stalled crypto bill made headlines this week.
U.S. President Donald Trump was said to have met Coinbase CEO Brian Armstrong privately on Tuesday before publicly backing the company’s stance in an ongoing lobbying dispute with banks that has stalled a major cryptocurrency bill.
Crypto exchange stocks and bitcoin miners surged as Trump urged banks to “make a good deal” with the crypto industry to advance the law.
However, talks on the landmark legislation reportedly reached a stalemate after banks said they could not support a compromise proposed by the White House. The move raised doubts about whether the bill will pass this year and drew criticism from Trump, who accused lenders of trying to derail it.
Affirm Holdings (AFRM) (+10.05% to $51.70) was gaining after the buy now, pay later lending platform said it is expanding its partnership with Stripe (STRIP) to support Shared Payment Tokens, which are expected to enable AI agents to initiate purchases on behalf of shoppers.
SoFi Technologies (SOFI) (+6.42% to $18.90) was rising after CEO Anthony Noto was reported to have acquired shares worth ~$1M. Additionally, the company announced grand plans for its U.S. dollar stablecoin, SoFi-USD.
On the other hand, Marex Group (MRX) (-17.97% to $35.65) led the midcap losers, despite exceeding Q4 consensus in terms of earnings and revenue. StoneX Group (SNEX) (-15.25% to $108.06) hit a new 52-week low this week.
Figure Technology Solutions (FIGR) (+20.57% to $30.48) was among the notable gainers. The blockchain-native capital marketplace for tokenized assets was a likely beneficiary of the crypto price swings and recent talks on the crypto bill. Additionally, FIGR reported its February operating metrics this week.
For the smallcap stocks, Gemini Space Station (GEMI) led the gainers, with a jump of 48.26% to close the week at $8.94. Real estate tech stock loanDepot (LDI) (-14.49% to $1.77) and VersaBank (VBNK) (-12.85% to $14.38) topped the losers.