It has been a rough Friday for investors trading on the ASX.
The S&P/ASX 200 Index (ASX: XJO) is down 1.6% to 8,736 points at the time of writing, with most of the market trading in the red.
That has been enough to put the benchmark index to record its biggest one-day fall in 7 weeks. It also comes just one day after the ASX 200 climbed 0.96% to close at 8,878.1 points.
So, why are investors suddenly heading for the exits?
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Oil price jump rattles investors
One of the main pressure points today is the rebound in oil prices.
According to Trading Economics, brent crude oil futures rose more than 2% to around US$102 a barrel after renewed concerns over reports of naval skirmishes involving the US and Iran in the Strait of Hormuz.
That is getting investors' attention because the Strait of Hormuz is one of the world's most important oil shipping routes. Around 20% of global oil flows pass through the waterway, but this has been halted since March.
Oil prices have already been elevated over recent months, and higher fuel costs are already flowing through to transport, freight, and everyday goods.
Unfortunately, another jump in oil prices only adds to those inflation concerns, which is not what investors want to see.
Banks and miners drag the market lower
The selling is being led by some of the market's biggest names.
Commonwealth Bank of Australia (ASX: CBA) is down 2.37% to $174.98, while Westpac Banking Corp (ASX: WBC) is falling 3.94% to $37.79.
National Australia Bank Ltd (ASX: NAB) is down 2.61% to $38.48, while ANZ Group Holdings Ltd (ASX: ANZ) is trading 1.37% lower at $36.84.
Macquarie Group Ltd (ASX: MQG) is also weaker, falling 1.84% to $237.42.
The major miners are also adding to the pressure.
BHP Group Ltd (ASX: BHP) is down 2.15% to $57.26, while Rio Tinto Ltd (ASX: RIO) is down 1.43% to $177.67.
Fortescue Ltd (ASX: FMG) is also in the red, falling 1.14% to $21.175.
Foolish bottom line
Today's fall shows how quickly the market can move when oil prices and geopolitical risks rise at the same time.
The ASX 200 had bounced strongly on Thursday, but that move has been completely unwound. With banks, miners, and retailers all under pressure, the selling has not been limited to one corner of the market.
The next thing to watch is whether the index can hold above the 8,700 point level.
