Markets slip as Middle East tensions rise

Stocks fell on Tuesday as rising tensions in the Middle East overshadowed strong performance from the previous quarter.

The Dow Jones Industrial Average decreased by 173.18 points, or 0.41 per cent, closing at 42,156.97. The S&P 500 dropped 0.93 per cent to 5,708.75, and the Nasdaq Composite slid 1.53 per cent to 17,910.36.

West Texas Intermediate crude oil prices soared after the Israel Defense Forces reported missile strikes from Iran. The CBOE Volatility Index (VIX), often referred to as Wall Street’s fear gauge, surged above 20, reflecting increased anxiety among traders.

Nevertheless, oil prices eased from their highs, and stocks recovered somewhat from their lows as investors anticipated limited damage and restrained retaliation from Israel.

Gold futures rallied due to the heightened conflict in the Middle East, with gold finishing the day up 1.2 per cent.

Over 60 per cent of S&P 500 stocks saw declines during the session, indicating broad market challenges. However, energy stocks bucked the trend, with the S&P 500 energy sector rising over 2 per cent in response to the escalating situation.

Technology stocks were particularly affected, dragging down the Nasdaq significantly. Tesla, Nvidia, and Apple all closed lower, while Meta Platforms, the parent company of Facebook, managed to reach an all-time intraday high.

Small-cap stocks also faced pressure, with the Russell 2000 falling 1.5 per cent.

Traders are closely monitoring a strike by the International Longshoremen’s Association along the East and Gulf coasts, which, while not immediately impacting consumers, could result in significant economic losses for the U.S.

Investors are now looking ahead to Friday’s nonfarm payrolls report, which may act as a key catalyst for the major indexes.

Futures

The SPI futures are pointing to a flat start, up 0.02 per cent.

Currency

One Australian dollar at 7.40am was buying 68.88 US cents.

Commodities

Gold gained 1.16 per cent. Silver added 0.90 per cent. Copper rose 0.79 per cent. Oil gained 2.44 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE added 0.48 per cent, Frankfurt lost 0.58 per cent, and Paris fell 0.81 per cent.

Turning to Asian markets, Tokyo’s Nikkei gained 1.93 per cent, while Hong Kong’s Hang Seng and China’s Shanghai Composite were closed.

Yesterday, the Australian share market closed 0.74 per cent lower at 8209.

Dividends payable
CSL Ltd (ASX:CSL)
COG Financial Services Ltd (ASX:COG)
HMC Capital Ltd (ASX:HMC)
MAAS Group Holdings Ltd (ASX:MGH)
Peter Warren Automotive Holdings Ltd (ASX:PWR)
Servcorp Ltd (ASX:SRV)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap, Marketech.

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