Wall Street slides as ceasefire uncertainty swirls; Trump’s Fed nominee grilled
Stan Choe
Updated ,first published
While Wall Street and oil prices fell sharply as Middle East uncertainty hovered over the markets, Donald Trump announced after the closing bell that the United States had extended the ceasefire with Iran at the request of Pakistan, while awaiting a unified offer from the Islamic Republic.
The S&P 500 erased an early rise to fall 0.6 percent, the Dow Jones fell 293 points, or 0.6 percent, after erasing a previous 400-point gain, while the Nasdaq composite lost 0.6 percent.
The Australian share market is poised to fall, with futures pointing to a loss of 63 points, or 0.7 per cent, at the open at 6.25am (AEST). The ASX fell on Tuesday. The Australian dollar fell 0.3 percent to 71.58¢.
Oil prices also fluctuated, and the barrel price of Brent crude oil rose from below $95 to nearly $100 during the day. It rose 3.1 percent to $98.48.
The moves were mostly more modest than the wild swings that shook Wall Street early in the war, when the price of a barrel of Brent crude briefly topped $119 and the S&P 500 fell nearly 10 percent below its previous all-time high. US stock market remains close to its latest record; This shows that there is still optimism in financial markets that the US and Iran will avoid the worst-case scenario for the economy.
“It has become a cliché to say that the economic hit will depend on the duration of the Middle East conflict, but that cliché rings true,” according to Brian Jacobsen, chief economic strategist at Annex Wealth Management.
Much of the tension in financial markets has focused on what will happen to the Strait of Hormuz, a narrow waterway off the coast of Iran that oil tankers use to exit the Persian Gulf. A long-term shutdown would keep crude oil stuck in the gulf and away from customers around the world.
Helping limit Wall Street’s losses were UnitedHealth Group and other major companies, which reported more profits than analysts expected in the latest quarter.
UnitedHealth rose 7 percent after it also raised its profit forecast for full-year 2026. This is important because stock prices tend to follow the path of corporate profits over the long term, and it’s a double-plus when companies not only make top earnings forecasts but also project better growth in the future.
Quest Diagnostics likewise rose 4.4 percent after reporting higher profits than analysts expected in the latest quarter and raising its profit forecast for the full year.
Amazon rose 0.7 percent after Anthropic said it had signed a new deal and committed more than US$100 billion ($140 billion) over the next 10 years to AWS technologies to train and run its Claude chatbot.
However, these were still overshadowed by the 2.5 percent decline of Apple, which was the heaviest weight of the day in the S&P 500 index. Apple fell in early trading after Tim Cook said he would step down as CEO on September 1 and become executive chairman of the iPhone maker.
Cook is turning over control to company veteran John Ternus, who rose through Apple’s hardware engineering ranks.
Meanwhile, Tractor Supply fell 11.7 percent in the last quarter after its profit and revenue report fell short of expectations.
Overall, the S&P 500 fell 45.13 points to 7,064.01 points. Dow Jones index decreased by 293.18 points to 49,149.38, and Nasdaq composite index decreased by 144.43 points to 24,259.96 points.
Indices in foreign stock markets fell in Europe after the strong closing in Asia. South Korean Kospi gained 2.7 percent in value, making one of the biggest moves in the world.
In the bond market, Treasury yields rose after a report released Tuesday morning showed U.S. retailers made more money in March, the first full month of the war, than analysts expected. Even growth in retail sales was relatively steady when excluding those from gas stations.
The yield on the 10-year Treasury note rose to 4.31 percent from 4.26 percent late Monday, with gains accelerating along with oil prices later in the day.
Kevin Warsh, President Donald Trump’s nominee to head the Fed, said he made no promises to Trump that he would lower interest rates, even though Trump angrily called on the central bank to do so. Warsh faces a tightrope walk as U.S. senators consider his candidacy as investors want him to maintain the Fed’s independence from political interference.
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