NEW YORK (AP) — A stock market selloff engulfed the world Tuesday, hitting Wall Street. crude oil price Further rise due to concerns about widening war with iran. However, the big moves that rocked the market in the morning subsided significantly as the day progressed.
By the close of trading, the S&P 500 was down 0.9%. On a normal day, the index would have fallen as much as 2.5%, but it had fallen by as much as 2.5% on concerns that the effects of the war would linger further. damage to the economy More than I feared.
The Dow Jones Industrial Average fell 403 points, or 0.8%, after dropping more than 1,200 points in the morning. The decline in the Nasdaq Composite narrowed to 1%.
it was just one day ago U.S. stocks started the morning with a big drop, but then recovered everything and ended the day with a slight gain. Fueling this recovery was a record showing that past wars and conflicts in the Middle East usually don’t mean long-term pain for U.S. stocks.
AP Audio: Stocks sell off around the world, oil prices soar further on war fears, Dow Jones Industrial Average drops 500 points
The Associated Press’ Seth Stell reports on the impact the Iran war is having on Wall Street.
However, care was needed to ensure that the price of crude oil did not rise too high, exceeding $100 per barrel. Oil prices rose again on Tuesday, raising further alarm. The price of one barrel of Brent crude oil, the international standard, at one point exceeded $84.
However, the rate of increase tapered during the day, contributing to softening the decline in stock prices. Brent rose 4.7% to settle at $81.40. Benchmark U.S. crude oil rose 4.7% to $74.56 a barrel.
The move shows that oil prices and how much they exacerbate inflation are among the central concerns for investors. When fuel becomes more expensive, households in the United States and elsewhere have less money to spend. It will also increase expenses for businesses around the world, hurting their profits as well. And corporate profits are the lifeblood of the stock market.
Tuesday’s rise in oil prices came in the wake of Iran’s attack on the U.S. embassy in Saudi Arabia, part of an expansion that includes areas critical to global oil and gas production. Of particular concern are the Strait of Hormuz A narrow passageway off the coast of Iran through which approximately one-fifth of the world’s oil passes.
Iranian Brig. General Ebrahim Jabari, an adviser to the paramilitary Revolutionary Guards, vowed to set fire to ships passing through the strait.
Concerns over oil prices receded slightly later in the day when President Donald Trump said the U.S. Navy could begin escorting tankers through the straits “if necessary” to “ensure the free flow of energy to the world.”
What makes things uncertain for markets is the question of how long this war will last.
Massive attacks by America and Israel have already killed Iranians Supreme Leader Ayatollah Ali KhameneiBut President Trump said on his social media networks late Monday night that with America’s supply of munitions, “wars can be fought ‘forever’ and can be very successful.”
Some professional investors reiterated Tuesday that they don’t think this is the start of a long-term bear market and that stocks could recover if the war doesn’t last too long. But they acknowledge that it may take some time for that to become clear, and Tuesday’s market volatility shows how uncertain the situation is.
Tuesday’s sell-off began in Asia, where energy importer South Korea’s Kospi stock index fell 7.2% as markets reopened after a holiday on Monday. It was the worst day since two summers ago, and had recently broken records.
The Nikkei Stock Average in Tokyo fell 3.1%, even though analysts said Japan had significant stockpiles that would last more than 200 days. In Europe, where natural gas prices soared due to the war, France’s CAC40 fell by 3.5%.
On Wall Street, nearly three out of four stocks in the S&P 500 index fell. Unlike the previous day, influential Big Tech stocks failed to support the index, with Nvidia down 1.3%.
Some of Wall Street’s winners are targetrose 6.7% after the retailer reported its latest quarterly profit, which was better than analysts expected.
Overall, the S&P 500 fell 64.99 points to 6,816.63. The Dow Jones Industrial Average fell $403.51 to $48,501.27, and the Nasdaq Composite Index fell $232.17 to $22,516.69.
In the bond market, U.S. Treasury yields soared in the morning on concerns about inflation. The yield on the 10-year U.S. Treasury, which briefly exceeded 4.10%, has fallen to just below 4.06%. It was 4.05% late Monday and just 3.97% as of Friday.
Rising yields could make borrowing more expensive for U.S. households and businesses, impacting everything from mortgages to bond issuance. It also puts downward pressure on the prices of stocks and all other types of investments.
If the Treasury pays more interest, it could also drive down the price of gold, which pays nothing to investors. Gold fell 3.5% to settle at $5,123.70 an ounce on Tuesday, ending a strong rally above $5,300 as investors looked for safer places to park their money.
Possibility of high inflation tie the hands of the federal reserve and prevent interest rate cuts. The Fed cut interest rates several times last year and signaled further cuts in 2026. That would help boost the economy and job market, but lower interest rates could also worsen inflation.
Traders are now pushing back their expectations for when the Fed will resume rate cuts further into the summer, according to data from CME Group. That’s despite President Trump’s angry and personal calls for Fed officials to cut rates.
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AP Business Writers Yuri Kageyama and Michelle Chapman contributed.
