“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.
Still, stocks came back from losses of more than 2% early in the day. On Monday, the S&P 500 ended flat after clawing back from sharp early losses.
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%, to end at 6,816.59 points, while the Nasdaq Composite lost 227.62 points, or 1.00%, to 22,521.24. The Dow Jones Industrial Average fell 399.57 points, or 0.82%, 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 November 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 U.S. 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.
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