The first day of October was difficult for her Wall Street, as rising tensions in the Middle East dampened investor enthusiasm after a very strong third quarter.
THE Dow Jones Index fell 173.18 points or 0.41% to close at 42,156.97 points. THE S&P 500 fell 0.93% to 5,708.75 units, while the Nasdaq lost 1.53% of its value to finish at 17,910.36 points.
Oil prices soared after the Israeli military announced that Iran had begun bombing Israel with ballistic missiles. Additionally, Wall Street’s VIX fear index surpassed 20, indicating growing investor concern.
But towards the end of the session, the rise in oil prices moderated and stocks pared their big losses as traders expected damage and retaliation from Israel to be limited in scale.
“The fear of a crisis spreading is always destabilizing,” says Keith Buchanan, portfolio manager at Globalt Investments.
The energy sector of the S&P 500 followed the rise in oil prices, rising 2%. On the other hand, the technology sector sank, weighing on the Nasdaq. Shares of Tesla, Nvidia and Apple fell more than 3% on the session. However, Facebook’s parent group, Meta, bucked the trend, reaching close to its all-time high.
Small-cap stocks also fell, with the Russell 2000 index falling 1.5%.
“Markets are taking a wait-and-see attitude. The next 24 hours will be critical in determining how bad the situation will get and whether a shift to safe assets is warranted,” said Kathleen Brooks, head of research at CTB.
