04:47 PM EDT, 05/15/2026 (MT Newswires) -- US equity indexes slumped as continuing uncertainty over the reopening timeline for the Strait of Hormuz following the China summit spooked investors, sending government bond yields and crude oil futures sharply higher.

The Nasdaq Composite dropped 1.4% to 26,225.14, with the S&P 500 down 1.2% to 7,408.5 and the Dow Jones Industrial Average seen lower by 1% to 49,526.1 at the close on Friday.

A summit between US President Donald Trump and his Chinese counterpart, Xi Jinping, ended with mixed messages over the reopening of Hormuz, the Wall Street Journal reported. The waterway is the choke point to about a fifth of global crude oil flows, and the impact of its full or partial closure was evident in consumer and wholesale price inflation.

"The market could be pinning too much hope on the US-China talks yielding some positive results on Iran," ING Bank said in a note. "Some hope that China could exert pressure on Iran to reach a deal with the US, to end the war, and lead to a resumption of energy flows through the Strait of Hormuz."

A lack of trust is the biggest obstacle in negotiations to end the war with the US, and Tehran would be open to diplomatic help, particularly from China, to help ease tensions, Iran's foreign minister, Abbas Araghchi, was cited as saying in an Associated Press report. Contradictory messages have "made us reluctant about the real intentions of Americans," he added.

Expectations that Hormuz will quickly return to normal maritime traffic levels in June are based on "magical thinking" and underestimate the political and operational barriers to restoring flows, RBC Capital Markets strategists said in a note. The analysts said that oil market disruptions could persist well into the summer demand season.

US Treasury yields surged, with the 10-year up 13.8 basis points to 4.60%, the highest in about a year. The two-year advanced 8.9 basis points to 4.08%, the strongest level since February 2025.

West Texas Intermediate crude oil futures surged 4.5% to $105.73, and Brent crude futures jumped 3.5% to $109.44.

In precious metals, gold futures dropped 3.1% to $4,540.9, and silver futures sank 11% to $76.28 as the impact of higher crude prices has begun to show up in the inflation data. The probability of a 25 basis-point increase in interest rates in December surged to 39% on Friday from 14% a week ago, according to the CME FedWatch tool late Friday. The comparisons for September were 17% from 12%, and, for October, the data showed 27% versus 22%.

In economic news, industrial production rebounded by 0.7% in April, above expectations for a 0.3% increase in a Bloomberg-compiled survey, and following an upwardly revised 0.3% decline in March.

In company news, DexCom ( DXCM ) said Friday it has set new long-term financial goals, including organic revenue growth of more than 10% a year through 2030. Shares jumped 6.6%, the top gainer on the S&P 500 and the Nasdaq.