Wall Street’s primary indices experienced a sharp decline on Thursday, marking the end of a shortened holiday week, following U.S. President Donald Trump’s announcement of escalated actions against Iran. This development dampened hopes for a prompt resolution to the conflict in the Middle East.
In a televised address on Wednesday, Trump indicated a heightened military campaign over the next few weeks, a significant shift from his earlier assurance of a rapid withdrawal from Iran. Art Hogan, the chief market strategist at B Riley Wealth, expressed concern, stating, “The issue is that we are now less informed and face uncertainty in finding a resolution to this conflict.”
This news led to a notable surge in oil prices, with Brent crude futures reaching $108 US per barrel, resulting in a rise in energy stocks such as Exxon Mobil and Chevron by over 2%. The S&P 500 energy index also saw a gain of 2.4%.
However, this spike in oil prices negatively impacted airline stocks, with United Airlines, Delta Air Lines, and American Airlines experiencing losses between four and six percent. Additionally, concerns over private credit emerged as Blue Owl limited investors’ withdrawals from certain funds, causing a decline in its shares by eight percent.
The overall market saw a downturn, with asset managers like Apollo Global, Blackstone, and Ares Management declining by 3.5% to 4.3%. Financial shares dropped by 1.1%, and technology stocks also slid by 1.8%, with companies like Micron, Lam Research, and Sandisk recording losses exceeding 3%.
As of 9:50 a.m. ET, the Dow Jones Industrial Average fell by 565.37 points to 46,000.37, the S&P 500 lost 79.70 points to 6,495.60, and the Nasdaq Composite dropped by 367.70 points to 21,473.24. The Russell 2000 index decreased by 1.3%, and the CBOE VIX index, Wall Street’s fear gauge, rose to 26.79 points.
Earlier in the week, optimism had prevailed in the market with hopes of a resolution to the conflict. However, this recent development led to the largest monthly losses in a year for the S&P 500 and Nasdaq in March, while Brent crude prices marked their strongest monthly performance on record.
Market participants are now anticipating no changes in Federal Reserve policy due to energy-driven inflation concerns, contrary to previous expectations of two rate cuts. Nonfarm payroll numbers on Friday will be closely watched, although U.S. markets will be closed for the Good Friday holiday.
Investors are also monitoring Elon Musk’s SpaceX, which filed for a U.S. IPO, aiming for a valuation of $1.75 trillion. Globalstar’s shares surged by 10% following reports of potential acquisition talks with Amazon.
Gas prices in Canada continued to rise, with the national average reaching $1.80 per litre. Cities like Vancouver, Montreal, Toronto, and Calgary saw prices ranging from $1.70 to $2.14 per litre, with Newfoundland averaging $2.05 per litre. Concerns over fluctuating prices have intensified, prompting noticeable changes in consumer behavior.