Major indexes retreat amid inflation concerns, with S&P 500 closing below key technical level for first time since November.
By yourNEWS Media Newsroom
U.S. equities declined Tuesday as investors weighed the economic fallout of escalating hostilities in the Middle East, with rising oil prices stoking concerns about renewed inflation pressures. Major indexes finished well above session lows but remained firmly negative by the close.
According to preliminary data, the Dow Jones Industrial Average fell 399.57 points, or 0.82%, to 48,505.21. The S&P 500 dropped 65.03 points, or 0.94%, ending at 6,816.59, while the Nasdaq Composite declined 227.62 points, or 1.00%, to 22,521.24.
Earlier in the session, all three benchmarks had been down more than 2% before rebounding. Monday’s session similarly saw sharp early losses erased by the close.
Selling on Tuesday was broad-based, with materials stocks leading sector declines among the S&P 500 components. The Cboe Volatility Index rose, reflecting heightened investor anxiety.
The conflict, now in its fourth day, has expanded as Israeli and U.S. forces conducted strikes across Iran, followed by Iranian retaliatory actions around the Gulf region and into Lebanon. Tehran’s threats to target vessels transiting the Strait of Hormuz, along with reported production halts by several Middle Eastern oil and gas producers, have pushed crude and natural gas prices higher.
The Strait of Hormuz, a narrow passage between Iran and Oman, carries roughly one-fifth of global oil consumption, making it a critical energy chokepoint.
“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 Joseph Tanious, chief investment strategist at Northern Trust Asset Management in San Diego.
Jed Ellerbroek, portfolio manager at Argent Capital Management, described the market’s reaction as relatively contained. The “reaction so far is very tame,” he said, suggesting that risk appetite has not fully eroded.
Higher oil prices have revived concerns that inflation could accelerate at a time when central banks are already navigating price pressures linked to tariffs and supply constraints. The U.S. 10-year Treasury yield briefly touched a one-week high before easing, and traders pushed back expectations for a 25-basis-point rate cut by the Federal Reserve to September from July, according to LSEG data.
In a technical development that some analysts view as bearish, the S&P 500 closed below its 100-day moving average for the first time since Nov. 20.
Individual stocks also saw notable moves. Shares of Blackstone declined after its flagship credit fund, BCRED, experienced a surge in redemption requests.
Market participants continue to monitor developments in the Middle East for signs of potential disruption to energy supplies, which could further influence inflation expectations, bond yields, and monetary policy outlooks in the weeks ahead.