Dow falls, Nasdaq drops 1% as oil spikes on escalating Middle East tensions: Live updates
A trader works on the floor of the New York Stock Exchange in New York City, Sept. 4, 2024.
Michael M. Santiago | Getty Images
Stocks slipped Tuesday as what appeared to be an escalating situation in the Middle East poured water on investor enthusiasm coming off a strong quarter.
The Dow Jones Industrial Average fell 247 points, or 0.4%. The S&P 500 pulled back 1.1%, and the Nasdaq Composite lost 1.9%.
West Texas Intermediate crude oil spiked after the Israel Defense Forces said Iran was firing missiles at the country. A jump in the CBOE Volatility Index (VIX), also known as Wall Street’s fear gauge, above 20 underscored the rising concern among traders.
“The fear of contagion is always destabilizing,” said Keith Buchanan, senior portfolio manager at Globalt Investments. “Aside from, of course, the paramount impact on lives, the markets take a direct hit when there are forces that are almost promising some level of destabilization.”
WTI crude oil intraday
About 4 out of every 5 S&P 500 stocks traded lower in the session, highlighting the broad troubles for the market. But energy names notably diverged following the Middle East report, with the S&P 500 sector climbing more than 1%.
Tech names felt the brunt of Tuesday’s declines, explaining the Nasdaq’s outsized losses. Tesla slid 4%, while Nvidia and Apple dropped more than 3%. But Facebook parent Meta bucked this trend, rising near all-time highs.
Small-cap stocks also took a hit, with the Russell 2000 sliding more than 1%.
Stocks come off winning month and quarter
Tuesday’s pullback comes after the S&P 500 and the Dow notched closing records in the previous session, which marked the end of the trading month and quarter. September is typically the worst month of the year for stocks, but this time it broke with past trends.
All three major averages posted monthly gains, and it was the first positive September for the S&P 500 since 2019. The S&P 500, Dow and Nasdaq also ended the third quarter in positive territory.
Stocks advanced Monday even after Federal Reserve Chair Jerome Powell said the central bank is “not on any preset course” when it comes to the next steps for rate policy. He said to expect two more cuts this year — that is, a quarter percentage point each — if the economy performs as anticipated.
Investors will now look to September’s nonfarm payrolls report on Friday, which could serve as a catalyst for the major averages.
Traders were also monitoring a strike by members of the International Longshoremen’s Association on the East and Gulf coasts. While consumers may not feel the pinch immediately, the stoppage could cost the U.S. economy hundreds of millions of dollars.
