Wall Street indexes end lower as Middle East conflict fans inflation fears
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Traders working on the floor of the New York Stock Exchange during afternoon trading on March 3, in New York City.
PHOTO: AFP
- US stocks fell on March 3 due to growing anxiety over the Middle East conflict's duration. The S&P 500 lost 0.94%, closing below its 100-day moving average.
- Tehran’s Strait of Hormuz threat and conflict drove up oil and gas prices. This fuelled inflation fears and pushed back Fed interest rate cut expectations to September.
- Blackstone shares fell after its flagship credit fund, BCRED, saw a surge in redemption requests. Despite market anxiety, investors' risk tolerance remained somewhat intact.
AI generated
NEW YORK - US stocks fell on March 3 as investors worried about how long the Middle East conflict may persist, but indexes ended well off the day’s lows.
Selling was broad-based, with materials down the most among the major S&P 500 sectors, and the Cboe Volatility index rose.
Investors are concerned about the effect of the conflict, now in its fourth day, on inflation as oil prices extended sharp gains.
Israeli and US forces hit targets across Iran, prompting Iranian retaliatory strikes around the Gulf as the conflict spread to Lebanon.
“While not much has changed fundamentally since yesterday, investors are growing anxious about the duration of the war and its impact on energy prices,” said Mr Joseph Tanious, chief investment strategist at Northern Trust Asset Management in San Diego.
Still, stocks came back from losses of more than 2 per cent early in the day. On March 2, the S&P 500 ended flat after clawing back from sharp early losses.
Mr Jed Ellerbroek, portfolio manager at Argent Capital Management, said the “reaction so far is very tame,” which suggests investors’ tolerance for risk remains somewhat intact.
According to preliminary data, the S&P 500 lost 65.03 points, or 0.94 per cent, to end at 6,816.59 points, while the Nasdaq Composite lost 227.62 points, or 1 per cent, to 22,521.24.
The Dow Jones Industrial Average fell 399.57 points, or 0.82 per cent, to 48,505.21.
In a potentially bearish signal, the S&P 500 closed below its 100-day moving average for the first time since Nov 20.
Shares of Blackstone were down after its flagship credit fund, BCRED, saw a surge in redemption requests.
Tehran’s threat to attack any vessel attempting to transit the Strait of Hormuz, combined with production halts by several Middle Eastern oil and gas producers, has driven up global shipping rates and prices of crude and natural gas. The strait, a critical chokepoint, carries roughly one-fifth of the world’s total oil consumption.
Investors worry that the higher oil prices could fuel inflation and complicate central bank policy decisions already strained by tariff-driven price increases.
The US 10-year Treasury yield earlier touched a one-week high and investors pushed back expectations for a 25-basis-point interest rate cut by the Federal Reserve to September from July, according to LSEG-compiled data.
