Wall Street oil price surge/ Middle East conflict impact/ U.S. stock market update/ oil stocks rising/ economic impact of Iran-Israel conflict/ Newslooks/ NEW YORK/ J. Mansour/ Morning Edition/ U.S. stocks edged lower on Wednesday, driven by rising oil prices as tensions in the Middle East raised concerns. The S&P 500 dipped 0.3%, and the Dow Jones and Nasdaq also slid. Investors are waiting to see how Israel responds to Iran’s missile attack, pushing Brent crude prices above $75 a barrel.
Wall Street Slides as Oil Prices Surge: Quick Looks
- Stock Market Reaction: S&P 500 down 0.3%, Dow Jones and Nasdaq also fall.
- Oil Prices Surge: Brent crude tops $75 per barrel, up 3%.
- Middle East Tensions: Investors cautious amid fears of broader conflict involving Iran.
- Key Stocks Drop: Humana plunges 20.5%, Nike falls 7.8%, Conagra and Tesla also see declines.
Wall Street Slips as Oil Prices Surge Amid Middle East Tensions
Deep Look
On Wednesday, Wall Street’s major indexes drifted lower as rising oil prices and uncertainty over the Middle East conflict cast a shadow over markets. Investors are watching closely for how Israel will respond to a missile attack from Iran, further raising concerns about the potential for a broader regional war.
The S&P 500 fell by 0.3%, while the Dow Jones Industrial Average slipped 14 points, or less than 0.1%. The Nasdaq Composite also dipped, down 0.4%. The market has been on edge this week as escalating tensions between Israel and Iran weighed on investor sentiment.
Oil Prices Surge Amid Middle East Conflict
Brent crude, the international oil benchmark, climbed roughly 3% to exceed $75 per barrel. While Israel itself isn’t a significant oil producer, Iran is a major player in the global energy market. With the risk of the conflict spreading to other oil-producing nations in the region, fears of supply disruptions are driving prices upward. This surge in oil prices comes after months of downward pressure due to concerns about slowing global demand.
In recent months, oil prices had dipped, with Brent falling below $70 a barrel. However, the current conflict could reverse this trend, potentially leading to higher fuel costs worldwide.
Energy Stocks Benefit, but Broader Market Wobbles
The rise in oil prices benefited U.S. energy companies, with Exxon Mobil gaining 2%, bringing its weekly increase to 5.7%. However, outside the energy sector, many stocks struggled amid fears of rising inflation and economic slowdown.
Humana, the health insurer, was the biggest loser on the day, plummeting 20.5%. The company warned that a drop in its Medicare Advantage ratings could hurt revenue in 2026. Humana also mentioned potential errors in the Centers for Medicare and Medicaid Services’ calculations, which it is attempting to challenge.
Retail Stocks Struggle
Nike faced a 7.8% decline despite reporting better-than-expected quarterly profits. Its revenue, however, fell short of forecasts, and the company withdrew its full-year financial guidance, adding to investor concerns. The athletic giant is grappling with the challenge of maintaining its brand’s appeal under new CEO Elliott Hill.
Conagra Brands, the company behind well-known food products like Duncan Hines and Hebrew National, also took a hit, falling 8.7%. The company reported weaker-than-expected profits, citing temporary disruptions in its manufacturing operations during a crucial grilling season.
Tesla Struggles Despite Increased Deliveries
Tesla shares dropped 5.8% even though the electric vehicle maker reported a rise in deliveries for the latest quarter, the first time this year it has seen an increase. While the number surpassed analyst expectations, some investors were hoping for a more significant jump in deliveries.
Job Market Report Raises Bond Yields
In the bond market, Treasury yields rose after data from ADP Research indicated that private-sector hiring accelerated last month, with employers adding 143,000 jobs. This unexpected strength in hiring lifted the yield on the 10-year Treasury to 3.81%, up from 3.73% the day before. The two-year Treasury yield, which more closely follows Federal Reserve policy expectations, increased to 3.65%.
This job report comes ahead of the government’s more comprehensive employment data, due Friday. Investors are closely watching the job market as it could influence the Federal Reserve’s next moves on interest rates. The Fed is balancing its effort to curb inflation while preventing the economy from slipping into a recession.
Fed Policy and Market Outlook
The Federal Reserve recently lowered its benchmark interest rate for the first time in over four years, with more cuts expected throughout 2025. However, concerns remain over how the Fed will manage inflation without stalling economic growth.
Traders are now betting that the Fed will make a smaller interest rate cut of a quarter-point, compared to the larger half-point cut many had anticipated last week. The job market’s resilience could be a key factor in the Fed’s decision-making process.
International Markets Mixed
Outside the U.S., global markets showed mixed results. Hong Kong’s Hang Seng surged by 6.2% as investors reacted to new economic measures from Beijing aimed at boosting China’s slowing economy. In contrast, Japan’s Nikkei 225 lost 2.2%, continuing its recent pattern of volatility. European markets were more stable, with indexes fluctuating slightly as investors absorbed news of rising oil prices and ongoing geopolitical risks.
Conclusion: Wall Street Wary as Oil Prices Surge
As tensions in the Middle East continue to rise, oil prices are climbing, creating uncertainty in the stock market. Investors are bracing for further developments in the conflict between Israel and Iran, while keeping a close watch on U.S. economic data, particularly Friday’s job report. Despite gains in the energy sector, concerns about inflation and slowing economic growth are weighing on the broader market.
