01:31 PM EDT, 04/12/2024 (MT Newswires) -- US equity indexes and government bond yields slumped as concern of a strike against Israel sent crude and gold higher while mega-cap bank earnings underwhelmed.

The S&P 500 dived 1.7% to 5,113.1, with the Nasdaq Composite down 1.8% to 16,144.2 and the Dow Jones Industrial Average 1.4% lower at 37,906.1 after midday Friday. All sectors fell, with technology, consumer discretionary, and materials leading the steepest decliners intraday.

West Texas Intermediate crude oil jumped 1.2% to $86.01 a barrel, trading close to its highest since October.

"The main focus to end the week is the start of the fiscal Q1 US bank earnings season and developments in oil markets," Derek Holt, head of capital markets economics at Scotiabank, said in a note. "Oil is up on a report that a strike by Iran against Israel is likely into this weekend."

JPMorgan Chase ( JPM ) reported better-than-expected Q1 earnings and revenue even as the banking giant's net interest income fell short of analysts' estimates. The lender raised its full-year expense outlook. Shares slumped 5.6% intraday, among the worst in the S&P 500 and the Dow.

Wells Fargo's ( WFC ) Q1 results topped market estimates even though the lender recorded lower net interest income annually. Shares drifted slightly lower intraday.

Citigroup ( C ) reported less-than-expected declines in fiscal Q1 results, but restructuring costs and an incremental Federal Deposit Insurance Corp. special assessment partially offset a revenue surge in banking. Shares dropped 2.2% intraday.

Meanwhile, gold advanced 0.7% to $2,387.6 per ounce after hitting another record high of $2,448.80 earlier in the session.

The gains come amid concern Iran is ready to retaliate against an Israeli attack on its embassy in Syria this month with missile or drone attacks, sparking worries of a wider Middle East war. CBS News reported the US has issued a warning for travel to Israel, fearing a large-scale attack on the country is near.

The US 10-year yield fell 7.5 basis points to 4.5%. An 8.6 basis-point drop in the two-year Treasury pushed the yield to 4.88%.

Meanwhile, in economic news, the University of Michigan's preliminary consumer sentiment index fell to 77.9 in April from 79.4 in March, below expectations for a drop to 79 in a survey compiled by Bloomberg. Respondents saw one-year inflation expectations at 3.1%, up from 2.9% in March, while five-year inflation expectations increased to 3% from 2.8%.

"These are clearly moves in the wrong direction from the Fed's point of view, but the levels are still consistent with anchored inflation expectations," Jefferies US Economist Thomas Simons said in a note. "For context, the 1-year index was 4.2% and 4.5% in October and November of last year."

The probability of a 25 basis point rate in June rose to 26% as of Friday afternoon, compared with 20% just a day ago, according to the CME Group's FedWatch Tool. The rate-cut likelihood is still down from 51% a week following the consumer price inflation data released on Wednesday.