Wall Street’s main indexes slipped on Friday as the Iran war approached its fourth week, roiling energy markets and prompting investors to aggressively reprice bets on the Federal Reserve’s interest-rate cuts.

The conflict in the Middle East showed no signs of easing as Iran attacked an oil refinery in Kuwait and a report said that the Trump administration is planning to occupy or blockade Iran’s Kharg Island to pressure Iran to reopen the Strait of Hormuz.

Investors also weighed major nations’ efforts to ease energy supplies. Brent prices wobbled throughout the day and were last at $108 a barrel.

Offering some comfort, FedEx, often seen as a barometer of business activity, issued upbeat forecasts and said global demand was holding steady despite geopolitical tensions, sending its shares up 3.4%. Rival United Parcel Service added 0.6%.

Still, investors are weighing the impact of higher oil prices on corporate earnings, as the first quarter comes to an end.

“The longer this goes on, you’re going to start to see companies report in earnings that they’ve had price pressures and it could be all through the chain,” said Joe Saluzzi, co-head of equity trading at Themis Trading.

A flurry of central bank decisions this week along with the Fed acknowledged how the conflict had complicated policymaking. Fed Governor Christopher Waller said he was planning to dissent in favor of a rate cut at the central bank’s meeting due to unexpected job losses until a developing oil shock raised inflation risks.

While U.S. policymakers are still penciling in at least one quarter-point interest rate cut this year, markets are less convinced. Traders have pushed their bets for a rate cut to sometime in 2027, from December 2026 earlier this month, according to LSEG-compiled data.

Major Markets Fall

At 9:58 a.m. ET, the Dow Jones Industrial Average fell 110.31 points, or 0.24%, to 45,911.12, the S&P 500 lost 46.58 points, or 0.71%, to 6,559.91 and the Nasdaq Composite lost 259.01 points, or 1.17%, to 21,831.68.

Wall Street’s fear gauge, the CBOE volatility index, spiked 1.25 points to 25.31.

Seven of the 11 S&P 500 sector indexes were in the red, led by consumer discretionary’s 1.2% drop.

Friday also marks the once-in-a-quarter simultaneous expiry of derivatives contracts tied to stocks, index options and futures, also known as “triple witching,” which can boost trading volume and aggravate volatility.

All three main indexes were heading for their fourth straight week of losses and were below their 200-day moving average, a technical indicator reflecting long-term momentum.

The small-cap-focused Russell 2000 index slipped 0.7% and had briefly touched a 10% drop from all-time highs earlier this week.

Super Micro Computer tumbled 28.6% after three people associated with the artificial intelligence server maker were charged with smuggling at least $2.5 billion of AI technology to China.

Rival Dell advanced 4.3%.

Gains have been strong in energy stocks, with the S&P 500 sector index set for its 13th straight weekly winning streak, the longest on record, as geopolitical events in Venezuela and the Middle East dominated much of the first quarter.

Halliburton was up marginally and Cheniere Energy added more than 1%.

Amazon slipped over 1%. Reuters reported that the megacap introduced its first smartphone, hoping to take on Apple and Samsung.

Declining issues outnumbered advancers by a 3.22-to-1 ratio on the NYSE and by a 2.48-to-1 ratio on the Nasdaq.

The S&P 500 posted eight new 52-week highs and 15 new lows, while the Nasdaq Composite recorded 21 new highs and 98 new lows.

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(Reporting by Johann M Cherian, Utkarsh Tushar Hathi in Bengaluru; Editing by Saumyadeb Chakrabarty and Maju Samuel)