A slump in oil prices sparked a global selloff in financial markets Friday, with losses spreading from Asia to Europe to the U.S., where stocks fell sharply, capping their worst week since the summer.
The selling was broad, with all 10 sectors of the Standard & Poor’s 500-stock index ending down. Fearful investors put their money in government bonds, especially U.S. Treasurys. Another measure of fear in the markets, the Vix index, jumped and is now up 70 percent in just five days.
Investors worry the sharp fall in the price of oil and other commodities is a sign of weakness in the global economy, especially China, and that will cut into profits at big energy companies and suppliers of raw materials as well as other companies.
Energy shares, already decimated this year, fell 3.4 percent Friday. Southwestern Energy plunged 14 percent. Freeport McMoRan, a mining giant, dropped 6 percent.
The trouble began with a report from the International Energy Agency that said the oversupply in oil would persist until late next year, even as demand continues to weaken. Benchmark U.S. crude plunged $1.14, or 3 percent, closing at $35.62 a barrel in New York. It has been falling for more than a year and is now at its lowest level since early 2009.
The Standard & Poor’s 500 index fell 39.86, or 1.9 percent, to 2,012.37. It was down 3.8 percent for the week, its worst showing since August.
The Dow Jones industrial average fell 309.54, or 1.8 percent, to 17,265.21.
The Nasdaq composite fell 111.70, or 2.2 percent, to 4,933.47.
Investors were also focused on a Federal Reserve meeting next week where the central bank is widely expected to announce an increase in its benchmark interest rate from a record low.