Highlights
Stocks weakened on Thursday amid nerves over apparent escalation in the US-Iran dispute over control of the Strait of Hormuz. The Dow Jones industrial average and the S&P 500 both lost 0.4 percent and the Nasdaq slipped 0.9 percent. Bond yields, the dollar, and oil prices all rose.
Markets fretted that the US/Israel-Iran war was set to reignite after the US seized another ship carrying Iranian oil, President Trump said the US would attack any Iranian vessel placing mines in the Strait, a third US aircraft carrier was headed for the region, and Israel said it was ready to increase strikes against Iran. Meanwhile, reports suggested Iran's military hardliners were preventing negotiations from resuming.
Meanwhile, US bond yields were also pressured higher by unexpected strength in economic reports including purchasing managers data for April showing faster than expected growth and rising cost pressures.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.