Dow drops 650 points as Iran war sends oil prices surging
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City. (Photo by Spencer Platt/Getty Images)
(NEW YORK) — The Dow Jones Industrial Average plummeted more than 650 points in early trading on Friday as the Iran war continued to spike oil prices.
The Dow fell 657 points, or 1.3%, while the S&P 500 dropped 1.2%. The tech-heavy Nasdaq declined 1%.
In a post on social media on Friday morning, President Donald Trump appeared to rule out a compromise with Iran.
Trump said there would be “no deal with Iran except UNCONDITIONAL SURRENDER!”
Oil prices soared as traders feared a prolonged blockade of the Strait of Hormuz, a trading route that facilitates the transport of about one-fifth of global oil supply.
U.S. crude oil prices topped $88 on Friday, marking a staggering 35% increase from a week earlier.
The stock selloff on Friday extended losses from a day earlier, when the Dow closed down 785 points.
This is a developing story. Please check back for updates.
Federal Reserve Chair Jerome Powell speaks during a press conference following the Federal Open Markets Committee meeting at the Federal Reserve on December 10, 2025 in Washington, DC. (Chip Somodevilla/Getty Images)
(NEW YORK) — The Federal Reserve on Wednesday is set to announce its latest decision on the level of interest rates, marking its first rate move since news surfaced of a federal criminal investigation into Fed Chair Jerome Powell.
The investigation ratcheted up an extraordinary clash between the nation’s top central banker and the White House, which has urged the Fed to significantly reduce interest rates.
The central bank is widely expected to hold interest rates steady on Wednesday. The anticipated move would end a string of three consecutive quarter-point rate cuts, aligning with a cautious approach outlined by Powell last month, before reports of the investigation into his conduct.
“We’re well positioned to wait and see how the economy evolves,” Powell said at a press conference in Washington, D.C., on Dec. 10.
Futures markets expect two quarter-point interest rate cuts this year, forecasting the first in June and a second in the fall, according to CME FedWatch Tool, a measure of market sentiment.
The federal probe appears to center on Powell’s testimony to Congress last year about cost overruns in a multi-billion-dollar office renovation project. Powell, who was appointed by Trump in 2017, issued a rare video message earlier this month rebuking the investigation as a politically motivated effort to influence the Fed’s interest rate policy.
The investigation follows months of strident criticism leveled at the Fed by Trump. The president denied any involvement in the criminal investigation during a brief interview with NBC News hours after the Fed posted Powell’s video.
Over the past year, hiring has slowed dramatically while inflation has remained elevated, risking an economic double-whammy known as “stagflation.” Those conditions have put the Fed in a difficult position.
The central bank must balance a dual mandate to keep inflation under control and maximize employment. To address pressure on both of its goals, the Fed primarily holds a single tool: interest rates.
The strain on both sides of the Fed’s mandate presents a “challenging situation” for the central bank, Powell noted last month.
“There’s no risk-free path for policy as we navigate this tension between our employment and inflation goals,” Powell said.
If the Fed raises interest rates as a means of protecting against elevated inflation, it risks a deeper slowdown of the labor market. On the other hand, by lowering rates to stimulate hiring, the Fed threatens to boost spending and worsen inflation.
The criminal investigation into Powell raised concern among some analysts and former top Fed officials, who said it poses a threat to central bank independence.
In the event a central bank loses independence, policymakers tend to favor lower interest rates as a means of boosting short-term economic activity, analysts previously told ABC News. Such a posture could pose a major risk of yearslong inflation fueled by a rise in consumer demand, untethered by interest rates.
Federal law allows the president to remove the Fed chair for “cause” — though no precedent exists for such an ouster. Powell’s term as chair is set to expire in May, but he can remain on the Fed’s policymaking board until 2028. Powell has not indicated whether he intends to remain on the board.
Editor’s note: This story has been updated, and will be updated again with the Fed’s rate decision.
Mark Zuckerberg (R), CEO of Meta testifies before the Senate Judiciary Committee at the Dirksen Senate Office Building on January 31, 2024 in Washington, DC. (Anna Moneymaker/Getty Images)
(WASHINGTON) — Mark Zuckerberg took the stand on Wednesday in a landmark Los Angeles trial alleging that major social media platforms were intentionally designed to be addictive for children and teens.
The case, which began last Monday in Los Angeles County Superior Court, centers on claims against Meta — the parent company of Facebook and Instagram — and YouTube, which is owned by Google. Plaintiffs argue the companies knowingly built features that encouraged compulsive use among young users, contributing to long-term mental health harm.
The lawsuit was brought by a now-20-year-old woman identified as “Kaley” and her mother, who allege she was exposed to addictive design features as a child. Her lawyers claim she got hooked on social media apps starting as young as age 6. She says features like auto-scrolling got her addicted to the platforms — ultimately leading to anxiety, depression and body image issues.
In opening statements, the plaintiffs’ attorney Mark Lanier told the jury the case was “as easy as ABC,” which he said stood for “addicting the brains of children.”
The case is the first of more than 1,500 similar lawsuits nationwide to go before a jury, potentially setting a precedent for how tech companies are held liable for product design.
Zuckerberg has appeared before Congress multiple times to address concerns over youth safety and online harms, but Wednesday marks the first time he will testify before a jury on these claims.
Several parents of children who died by suicide or accidental harm linked to online trends are expected to attend the proceedings. Some previously watched Zuckerberg apologize during a 2024 Capitol Hill hearing, where he acknowledged families who said social media contributed to their children’s deaths.
The companies deny the allegations, arguing that mental health outcomes are shaped by a range of factors beyond social media use. They say they have implemented safeguards aimed at protecting young users, including parental controls and accounts designed specifically for teens.
In a statement to ABC News at the start of the trial, a Meta spokesperson said, “We strongly disagree with these allegations and are confident the evidence will show our longstanding commitment to supporting young people.”
Meta said that the company has made “meaningful changes” to its services, such as introducing accounts specifically for teenage users.
Zuckerberg’s appearance follows testimony last week from Instagram head Adam Mosseri, who disputed characterizing Instagram use as an “addiction,” while acknowledging what he described as “problematic use.”
Mosseri testified that there’s always a tradeoff between “safety and speech,” saying users don’t like it when they remove options from Instagram.
The Los Angeles trial is part of a broader wave of litigation targeting social media companies. Meta is also facing a separate child safety lawsuit in New Mexico, while lawsuits brought by school districts — modeled after tobacco litigation in the 1990s — are expected to head to trial later this year.
Social platforms Snapchat and TikTok were previously named in the lawsuit but reached settlements with the plaintiffs last month.
A large vinyl decal displaying the official circular logo of the European Parliament, along with the full blue and yellow starred flag of the European Union, is affixed to the glass curtain wall of the institution’s building in Brussels, Belgium, on December 16, 2025. Michael Nguyen/NurPhoto via Getty Images
(NEW YORK) — European lawmakers on Wednesday suspended a trade agreement with the United States over tariff threats issued by President Donald Trump as part of his push to acquire Greenland.
The announcement came minutes after President Donald Trump reasserted his call for U.S. ownership of Greenland during a speech at the World Economic Forum in Davos, Switzerland.
The speech followed tariff threats issued by Trump days earlier against seven European Union countries, plus the U.K., over the issue.
European leaders, meanwhile, have pushed back on Trump’s ambitions. Greenland is a self-governing territory of the Kingdom of Denmark, a member of the EU.
Members of the Committee on International Trade (INTA) – a body within the European Parliament – hold “unshakable commitment to the sovereignty and territorial integrity of Denmark and Greenland,” European Parliament member Bernd Lange, an INTA chair on EU-US trade relations, said in a statement on Wednesday.
“By threatening the territorial integrity and sovereignty of an E.U. member state and by using tariffs as a coercive instrument, the U.S. is undermining the stability and predictability of EU-US trade relations,” Lange added.
The EU and US struck the trade agreement in July, moving to ratchet down tariffs on European goods and restore stability to the commercial relationship. At the time, European Commission President Ursula von der Leyen said the agreement “creates certainty in uncertain times.”
On Wednesday, Lange said the E.U. would pause the ratification process in response to Trump’s proposed tariffs. Under Trump’s plan, eight European nations – including Denmark, France, Germany and the United Kingdom – will be slapped with 10% tariffs beginning on Feb. 1. Those levies are set to escalate to 25% on June 1, Trump said.
In his speech on Wednesday, Trump ruled out use of the military in his push for Greenland. “We probably won’t get anything unless I decide to use excessive strength and force where we would be, frankly, unstoppable. But I won’t do that,” Trump said.
U.S. stocks slumped on Tuesday in response to the tariffs, with the Dow closing down 870 points, but recovered roughly half of those losses in a rally on Wednesday morning. In Europe, the pan-continental STOXX 600 index ticked slightly lower on Wednesday.
ABC News’ David Brennan contributed to this report.
