Highlights
Major stock indexes were mostly lower Wednesday as the market reacted badly to a new flareup in the US-Iran war and a jump in oil prices. The Dow Jones industrial average fell 1.1 percent while the S&P 500 was off 0.3 percent and the Nasdaq up 0.2 percent. Bond yields and oil prices jumped while the dollar weakened against most major currencies.
More strikes between US and Iran and President Trump’s comment that the ceasefire was over and that talks with Iran were a waste of time sent oil prices up 6-7 percent and spurred risk-off trading with bond yields surging on renewed inflation fears. Trump threatened more US attacks and called Iran’s leaders “scum.” Markets did not react to release of minutes from the Federal Reserve policy meeting, which depicted policy-makers divided over the outlook for policy, and was generally less hawkish than many feared.
Energy stocks were among the day’s best performers on rising oil prices. Consumer facing stocks most sensitive to rising energy costs were hit hardest. On the plus side, the Nasdaq outperformed as chip stocks, the key momentum trade that came off on Tuesday, recovered ground.