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New Straits Times
5 days ago
- Business
- New Straits Times
US stocks end lower as Israel-Iran fighting raises investor anxiety
NEW YORK: US stocks finished with losses on Tuesday as the Israel-Iran conflict raged on for a fifth day and kept investor anxiety high, with the US military moving fighter jets to the Middle East. Indexes added to losses in afternoon trading, and the Cboe Volatility Index rose to end at 21.60, its highest close since May 23. Reuters reported, citing three US officials, that the US military is deploying more fighter aircraft to the Middle East and extending the deployment of other warplanes. President Donald Trump called for Iran's "unconditional surrender". The war began on Friday when Israel attacked Iran's nuclear facilities. "We're in a period where visibility is not great, uncertainty is high, and the wall of worry is under construction," said Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis, Minnesota. Besides the Middle East conflict, investors are closely watching for any new information on Trump's tariffs, his tax-cut bill and US interest rates. A Federal Reserve monetary policy decision is expected on Wednesday, with policymakers widely seen leaving rates unchanged. All of the major S&P 500 sectors were lower except for energy, which gained along with sharply higher oil prices. Investors have worried that the conflict could create bottlenecks for oil exports from the oil-rich Middle East. Defence shares also rose, including Lockheed Martin, which was up 2.60 per cent. The Dow Jones Industrial Average fell 299.29 points, or 0.70 per cent, to 42,215.80, the S&P 500 lost 50.39 points, or 0.84 per cent, to 5,982.72 and the Nasdaq Composite lost 180.12 points, or 0.91 per cent, to 19,521.09. Sandven said the market could trade sideways until investors get more clarity, but earnings and other factors are likely to remain favourable for equities. Solar stocks fell after US Senate Republicans late on Monday unveiled proposed changes to Trump's tax-cut bill, including a phase-out of solar, wind and energy tax credits by 2028. Shares of Enphase Energy fell 24 per cent and Sunrun dropped 40 per cent. Eli Lilly shares eased 2.0 per cent after the company agreed to acquire Verve Therapeutics for up to US$1.30 billion. Shares of Verve surged. Earlier Tuesday, data showed US retail sales dropped more than expected in May, while factory production barely rose last month. "The resilient consumer is getting skittish," said Brian Jacobsen, chief economist at Annex Wealth Management. Declining issues outnumbered advancers by a 2.07-to-one ratio on the NYSE. There were 97 new highs and 77 new lows on the NYSE. On the Nasdaq, 1,325 stocks rose and 3,130 fell as declining issues outnumbered advancers by a 2.36-to-one ratio. Volume on US exchanges was 15.71 billion shares, compared with the 17.98 billion average for the full session over the last 20 trading days.
The Sun
6 days ago
- Business
- The Sun
US stocks rebound as investors brush off Middle East tensions
NEW YORK: US stocks ended higher on Monday, recovering from Friday's sharp losses as investors' concerns over ongoing hostilities between Israel and Iran eased somehow, Xinhua reported. Escalation of conflicts between Iran and Israel had briefly rattled markets -- oil prices surged, the Cboe Volatility Index (VIX) spiked, and gold prices rose as investors sought safe havens. However, Monday's action suggested confidence remained intact. High-yield credit spreads widened by just 2 basis points. The Dow Jones Industrial Average rose 317.30 points, or 0.75 per cent, to 42,515.09. The S&P 500 added 56.14 points, or 0.94 per cent, to 6,033.11. The Nasdaq Composite Index increased by 294.39 points, or 1.52 per cent, to 19,701.21. Seven of the 11 primary S&P 500 sectors ended in green, with communication services and technology leading the gainers by adding 1.53 per cent and 1.52 per cent, respectively. Meanwhile, utilities and health led the laggards by losing 0.50 per cent and 0.40 per cent, respectively. Market history supports the idea that geopolitical shocks are often short-lived in their market impact. According to Deutsche Bank analysts Parag Thatte and Binky Chadha, the S&P 500 typically drops around 6 per cent in the three weeks following a geopolitical event, but usually recovers those losses in the next three weeks. Deutsche Bank's Henry Allen added in a Monday note that geopolitical events tend to have lasting effects on equities only when they disrupt the real economy, either by slowing growth or driving inflation. So far, investors seem to be betting that neither scenario is likely in the near term. Despite lingering geopolitical concerns, historically low equity positioning and resilient fundamentals may be keeping a broader sell-off at bay, allowing risk appetite to return for now. 'Focus will remain on geopolitical headlines, but as long as the conflict stays limited between Israel and Iran, it's unlikely to materially impact the markets,' said Tom Essaye at the Sevens Report. Tesla rose more than 1 per cent on Monday, while Meta Platforms climbed 2.9 per cent, helping power the broader market. Palantir, often seen as a beneficiary of rising geopolitical instability due to its defence and AI ties, rose nearly 3 per cent. The rising move comes ahead of a key week for monetary policy. Investors digested a weaker-than-expected manufacturing survey released Monday morning by the New York Federal Reserves (Fed), adding to signs of slowing momentum in the industrial sector. Still, the data did little to shift expectations ahead of the Federal Reserve's interest rate decision on Wednesday. According to CME Group's FedWatch Tool, futures markets are pricing in a 100 per cent chance that the Fed will hold rates steady, despite renewed pressure from US President Donald Trump, who has called on Fed Chair Jerome Powell to cut interest rates. However, elevated oil prices stemming from the conflict in the Middle East are expected to keep inflation risks on the Fed's radar and reduce the likelihood of rate cuts in the near term. 'Markets got a reminder that tariffs aren't the only potential source of market volatility,' said Chris Larkin at E*Trade from Morgan Stanley. 'Right now, markets are signalling they expect the situation in the Middle East to remain contained, but any surprises could have an oversized impact on sentiment.'
The Sun
6 days ago
- Business
- The Sun
Wall Street rebounds as Israel-Iran tensions ease
NEW YORK: US stocks ended higher on Monday, recovering from Friday's sharp losses as investors' concerns over ongoing hostilities between Israel and Iran eased somehow, Xinhua reported. Escalation of conflicts between Iran and Israel had briefly rattled markets -- oil prices surged, the Cboe Volatility Index (VIX) spiked, and gold prices rose as investors sought safe havens. However, Monday's action suggested confidence remained intact. High-yield credit spreads widened by just 2 basis points. The Dow Jones Industrial Average rose 317.30 points, or 0.75 per cent, to 42,515.09. The S&P 500 added 56.14 points, or 0.94 per cent, to 6,033.11. The Nasdaq Composite Index increased by 294.39 points, or 1.52 per cent, to 19,701.21. Seven of the 11 primary S&P 500 sectors ended in green, with communication services and technology leading the gainers by adding 1.53 per cent and 1.52 per cent, respectively. Meanwhile, utilities and health led the laggards by losing 0.50 per cent and 0.40 per cent, respectively. Market history supports the idea that geopolitical shocks are often short-lived in their market impact. According to Deutsche Bank analysts Parag Thatte and Binky Chadha, the S&P 500 typically drops around 6 per cent in the three weeks following a geopolitical event, but usually recovers those losses in the next three weeks. Deutsche Bank's Henry Allen added in a Monday note that geopolitical events tend to have lasting effects on equities only when they disrupt the real economy, either by slowing growth or driving inflation. So far, investors seem to be betting that neither scenario is likely in the near term. Despite lingering geopolitical concerns, historically low equity positioning and resilient fundamentals may be keeping a broader sell-off at bay, allowing risk appetite to return for now. 'Focus will remain on geopolitical headlines, but as long as the conflict stays limited between Israel and Iran, it's unlikely to materially impact the markets,' said Tom Essaye at the Sevens Report. Tesla rose more than 1 per cent on Monday, while Meta Platforms climbed 2.9 per cent, helping power the broader market. Palantir, often seen as a beneficiary of rising geopolitical instability due to its defence and AI ties, rose nearly 3 per cent. The rising move comes ahead of a key week for monetary policy. Investors digested a weaker-than-expected manufacturing survey released Monday morning by the New York Federal Reserves (Fed), adding to signs of slowing momentum in the industrial sector. Still, the data did little to shift expectations ahead of the Federal Reserve's interest rate decision on Wednesday. According to CME Group's FedWatch Tool, futures markets are pricing in a 100 per cent chance that the Fed will hold rates steady, despite renewed pressure from US President Donald Trump, who has called on Fed Chair Jerome Powell to cut interest rates. However, elevated oil prices stemming from the conflict in the Middle East are expected to keep inflation risks on the Fed's radar and reduce the likelihood of rate cuts in the near term. 'Markets got a reminder that tariffs aren't the only potential source of market volatility,' said Chris Larkin at E*Trade from Morgan Stanley. 'Right now, markets are signalling they expect the situation in the Middle East to remain contained, but any surprises could have an oversized impact on sentiment.'
The Star
6 days ago
- Business
- The Star
U.S. stocks rebound as investors brush off Middle East tensions
NEW YORK, June 16 (Xinhua) -- U.S. stocks ended higher on Monday, recovering from Friday's sharp losses as investors' concerns over ongoing hostilities between Israel and Iran eased somehow. Escalation of conflicts between Iran and Israel had briefly rattled markets -- oil prices surged, the Cboe Volatility Index (VIX) spiked, and gold prices rose as investors sought safe havens. However, Monday's action suggested confidence remained intact. High-yield credit spreads widened by just 2 basis points. The Dow Jones Industrial Average rose 317.30 points, or 0.75 percent, to 42,515.09. The S&P 500 added 56.14 points, or 0.94 percent, to 6,033.11. The Nasdaq Composite Index increased by 294.39 points, or 1.52 percent, to 19,701.21. Seven of the 11 primary S&P 500 sectors ended in green, with communication services and technology leading the gainers by adding 1.53 percent and 1.52 percent, respectively. Meanwhile, utilities and health led the laggards by losing 0.50 percent and 0.40 percent, respectively. Market history supports the idea that geopolitical shocks are often short-lived in their market impact. According to Deutsche Bank analysts Parag Thatte and Binky Chadha, the S&P 500 typically drops around 6 percent in the three weeks following a geopolitical event, but usually recovers those losses in the next three weeks. Deutsche Bank's Henry Allen added in a Monday note that geopolitical events tend to have lasting effects on equities only when they disrupt the real economy, either by slowing growth or driving inflation. So far, investors seem to be betting that neither scenario is likely in the near term. Despite lingering geopolitical concerns, historically low equity positioning and resilient fundamentals may be keeping a broader sell-off at bay, allowing risk appetite to return for now. "Focus will remain on geopolitical headlines, but as long as the conflict stays limited between Israel and Iran, it's unlikely to materially impact the markets," said Tom Essaye at the Sevens Report. Tesla rose more than 1 percent on Monday, while Meta Platforms climbed 2.9 percent, helping power the broader market. Palantir, often seen as a beneficiary of rising geopolitical instability due to its defense and AI ties, rose near 3 percent. The rising move comes ahead of a key week for monetary policy. Investors digested a weaker-than-expected manufacturing survey released Monday morning by the New York Fed, adding to signs of slowing momentum in the industrial sector. Still, the data did little to shift expectations ahead of the Federal Reserve's interest rate decision on Wednesday. According to CME Group's FedWatch Tool, futures markets are pricing in a 100 percent chance that the Fed will hold rates steady, despite renewed pressure from U.S. President Donald Trump, who has called on Fed Chair Jerome Powell to cut interest rates. However, elevated oil prices stemming from the conflict in the Middle East are expected to keep inflation risks on the Fed's radar and reduce the likelihood of rate cuts in the near term. "Markets got a reminder that tariffs aren't the only potential source of market volatility," said Chris Larkin at E*Trade from Morgan Stanley. "Right now, markets are signaling they expect the situation in the Middle East will remain contained, but any surprises could have an oversized impact on sentiment."
Yahoo
7 days ago
- Business
- Yahoo
The Stock Market Is Shrugging Off the Israel-Iran Conflict. Is That Normal?
Investors were sanguine on Monday about the risk of conflict between Israel and Iran spiraling and causing an oil-supply shock that would materially affect the global economy. The rebound from geopolitical sell-offs tends to happen just as quickly as the sell-off itself, according to a recent historical analysis. Oil-price shocks typically only have a sustained impact on the stock market if they slow economic growth, increase inflation, or rose and oil prices retreated on Monday as investors shrugged off the continuation of hostilities between Israel and Iran over the weekend. The S&P 500 was up nearly 1% in midday trading Monday, while the Nasdaq Composite rose 1.4%, and the Dow Jones Industrial Average was up just under 1%. Friday was a rough day on Wall Street—oil prices surged, causing stocks to slide, the Cboe Volatility Index (VIX) to jump, and gold to rise as investors moved into safe havens. But there was plenty of evidence that investors weren't that concerned about the conflict spiraling out of control. High yield credit spreads increased just 2 basis points, a sign of modest risk aversion, and the MSCI World Index closed just 1% off its all-time high. It's not out of the ordinary for markets to quickly shrug off major geopolitical events. The S&P 500 tends to fall about 6% in the three weeks after a geopolitical shock before recovering all of those losses in the following three weeks, according to a recent survey by Deutsche Bank analysts Parag Thatte and Binky Chadha. And with equity positioning historically low by their measure, a bigger sell-off is even more unlikely today. Geopolitics has had a sustained impact on the stock market only when it's affected the real economy, whether by slowing growth or lifting inflation, Deutsche Bank analyst Henry Allen said in a note on Monday. There are only a few examples of oil shocks having a meaningful impact on stocks, including the oil embargo of the 1970s and Iraq's invasion of Kuwait in 1990. The most recent example of a geopolitical disruption to the stock market is Russia's invasion of Ukraine in 2022, which bears some troubling resemblance to today. Inflation was already running above target when Russia's invasion drove oil prices up more than 30% in a matter of weeks. The oil- supply shock fueled an acceleration of already-elevated inflation, likely forcing central banks to raise interest rates faster and higher than they would have otherwise, Allen's report said. Inflation has moderated considerably since hitting a 40-year high in June 2022. Consumer prices increased 2.4% year-over-year in May, just slightly above the Federal Reserve's 2% target. However, President Donald Trump's tariffs threaten to raise prices, and their inflationary impact could be exacerbated by escalation in the Middle East. 'The inflation risk really matters, because the problem with higher inflation is it will restrict central banks from cutting rates, as is currently priced,' Allen wrote. The majority of investors are currently pricing in rate cuts of at least 100 basis points by the end of next year. Resurgent or sticky inflation would leave the Fed little room to cut interest rates if tariffs and high oil prices weighed on growth or the labor market. Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
