Wall Street’s primary indices plummeted on Thursday during the final session of a shortened holiday week, following U.S. President Donald Trump’s indication of heightened aggression towards Iran. This development diminished hopes for a prompt resolution to the Middle East conflict. In a televised address on Wednesday, Trump announced an escalation in military activities over the next two to three weeks, a stark departure from his previous statement suggesting a swift withdrawal from Iran.
Art Hogan, the chief market strategist at B Riley Wealth, remarked, “The challenge lies in the lack of new information. We are now in a position where we are less informed about finding a way to de-escalate this war.” The surge in oil prices, reaching approximately seven percent, drove Brent crude futures to $108 US per barrel. Consequently, energy stocks in the U.S. surged, with Exxon Mobil and Chevron each gaining over two percent. The S&P 500 energy index also saw a rise of 2.4 percent.
The spike in oil prices exerted pressure on airlines, resulting in United Airlines, Delta Air Lines, and American Airlines experiencing losses ranging from four to six percent. Concurrently, concerns over private credit resurfaced when Blue Owl limited investors’ withdrawal capacity from two retail-focused funds, leading to an eight percent drop in its shares.
Other asset managers, including Apollo Global, Blackstone, and Ares Management, witnessed declines between 3.5 and 4.3 percent. Financial shares dropped by 1.1 percent, while technology stocks slid by 1.8 percent, with companies like Micron, Lam Research, and Sandisk each experiencing declines exceeding three percent.
By 9:50 a.m. ET, the Dow Jones Industrial Average fell by 565.37 points, the S&P 500 lost 79.70 points, and the Nasdaq Composite dropped by 367.70 points. The Russell 2000 index also declined by 1.3 percent. The CBOE VIX index, Wall Street’s fear gauge, rose to 26.79 points after hitting a one-week low the previous day.
Earlier in the week, optimism surrounding a potential end to the conflict had lifted market sentiment, positioning Wall Street’s major indices for their most substantial weekly increase in four months and their first weekly gain in six weeks.
Regarding the impact of the Mideast conflict, the S&P 500 and the Nasdaq registered their largest monthly losses in a year in March, while Brent crude prices achieved their most robust monthly performance on record. Participants in the money market no longer anticipate any easing from the Federal Reserve, as energy-driven inflation concerns have clouded the central bank’s monetary policy outlook. Previously, they had predicted two rate cuts before the conflict.
On Friday, all eyes will be on the nonfarm payroll numbers following a decrease in weekly jobless claims last week. However, U.S. markets will be closed for the Good Friday holiday. Investors will also monitor developments related to Elon Musk’s SpaceX, which filed for a U.S. initial public offering confidentially on Wednesday, aiming for a $1.75 trillion valuation. Additionally, Globalstar’s shares surged by 10 percent following reports of Amazon’s potential acquisition of the low-earth-orbit communication satellites company.
Declining issues significantly outweighed advancers on both the NYSE and Nasdaq, with ratios of 3.84-to-1 and 4.47-to-1, respectively. The S&P 500 saw three new 52-week highs and 12 new lows, while the Nasdaq Composite recorded 13 new highs and 91 new lows.
In parallel, Canadian gas prices continued to rise, with the national average retail price per liter hitting $1.80. Notably, Vancouver experienced the highest average price at $2.14 per liter, followed by Montreal at $1.95 per liter, Toronto at $1.82 per liter, and Calgary at around $1.70 per liter. Newfoundland’s gas prices averaged $2.05 per liter, prompting concerns among consumers due to the frequent fluctuations. Dawn Sharpe, a gas station co-owner near St. John’s, highlighted the increasing volatility in pump prices, stating that consumers are becoming apprehensive about these changes.