US stock indices fell on Wednesday as renewed military clashes between the United States and Iran drove crude oil prices higher and raised concerns about prolonged inflationary pressures. The selloff ended the S&P 500’s nine-session winning streak.
Market Performance
- Dow Jones Industrial Average: Fell 620.72 points, or 1.21%, to close at 50,687.07
- S&P 500 Index: Declined 0.74% to 7,553.68
- Nasdaq Composite: Dropped 0.89% to 26,853.98
The declines ended record-winning streaks for both the S&P 500 and Nasdaq, which had climbed for nine consecutive sessions.
Oil Prices Surge
Crude futures climbed sharply following the latest escalation in the Middle East. West Texas Intermediate rose 2.4% to settle at $96.02 per barrel, while Brent Crude gained 1.9% to end at $97.81 per barrel.
The Strait of Hormuz, through which approximately one-fifth of global oil shipments pass, has remained largely closed since the US and Israel launched strikes on Iran in late February.
Bond Yields Climb
Rising oil prices contributed to higher Treasury yields, with the 10-year yield approaching 4.5% and the 30-year yield nearing 5%. Market expectations for Federal Reserve rate cuts have diminished, with traders now pricing in the possibility of a rate increase by year-end.
“The combination of rising oil prices, higher bond yields, and geopolitical uncertainty is a triple headwind that’s difficult for equities to absorb in the short term,” said Michael Wilson, chief equity strategist at Morgan Stanley.