The S&P 500 Index retreated by over 0.6% on Friday, continuing a retreat that started on Thursday as market participants reacted to the latest NVIDIA earnings.

The blue-chip index, which tracks the biggest companies in the United States, dropped to $6,857, down substantially from the year-to-date high of $7,010.

Other stock indices like the Nasdaq 100, Dow Jones, and the Russell 2000 declined by over 1%. 

The decline happened as concerns about the $1.8 trillion private credit industry escalated. These concerns started earlier this month after Blue Owl, a company with over $300 billion in assets under management, sent shockwaves in the broader market.

Blue Owl sold a private credit portfolio and announced measures to limit redemption by its investors. This move was an escalation to what happened last year when the company attempted to merge a private and public fund.

The crisis escalated this week after a fund managed by Apollo Asset Management slashed its dividend in a bid to preserve cash as defaults rose. 

As a result, top private credit and equity companies like Blue Owl, Apollo, Ares, and Blackstone continued falling. Blue Owl stock dropped by over 4.3%, bringing its three-month decline to 25%.

Apollo Global Management’s stock dropped by over 7%, while Ares fell by over 6%. Blackstone and KKR stocks also continued falling.

The S&P 500 Index also dropped as odds of a US attack on Iran jumped after Israel’s embassy asked non-essential staff to leave. As a result, airline stocks like United Airlines, Delta Airlines, and American Airlines were among the top laggards in the S&P 500 Index.

Additionally, the index retreated after the US published strong producer price index (PPI) data. 

The report showed that the headline PPI rose by 2.9% in January, while the core PPI moved to 3.6%. These numbers mean that the Federal Reserve may find it difficult to cut interest rates in the coming meetings.