Wall Street opened lower on Tuesday, giving up the strong gains seen in the previous session. At 9.30 AM ET, Dow Jones fell 107.69 points (0.19%) to 46,118.78. S&P 500 dropped 22.88 points (0.35%) to 6,558.12, Nasdaq led the losses, falling 161.30 points (0.73%) to 21,785.46.
Middle East tensions keep investors on edge
Markets turned cautious again as uncertainty grew around the ongoing conflict between Israel and Iran. Earlier optimism had lifted stocks on Monday after President Donald Trump said the United States and Iran held productive talks “regarding a complete and total resolution of our hostilities in the Middle East.”
However, that optimism faded after Iran denied that such talks were taking place. Fresh attacks between Israel and Iran added to the confusion, leaving investors unsure about how the situation will unfold. “It’s like whiplash. You wake up every morning and wonder what it’s going to be next … Investors are still facing a pretty wide range of outcomes with this and a lot of it depends on time frame,” said Christopher O’Keefe, managing director and lead portfolio manager at Logan Capital Management to Reuters.
Oil prices rebound sharply
Oil prices jumped on Tuesday after falling in the previous session, adding to market concerns. Brent crude rose more than 3% to above $103 per barrel, West Texas Intermediate crude climbed over 4% to trade above $92 per barrel. Higher oil prices are seen as a risk to inflation and economic growth, which weighed on investor sentiment.
Experts warn risks are still high
Regardless of some relief earlier in the week, market experts say risks remain significant. “We still have a lot of wood to chop in terms of where oil prices end up shaking out; how those impact underlying economic conditions. So we think we’re okay for right now with this down 5% to 10% narrative, but we have to be on the lookout that the risks are still out there and are still pretty notable,” said Citi US equity strategist Scott Chronert to CNBC.
Some experts believe the market is currently stuck without a clear trend. “It’s kind of a going nowhere market right now, sort of trendless. Almost nothing is up. Nothing is really down dramatically. Nothing has really made much money over the past nine months,” said DoubleLine Capital CEO Jeffrey Gundlach on CNBC’s “Closing Bell.”
Tech stocks under pressure
At 9.30 AM ET, major technology stocks were mostly lower in early trading. Nvidia slipped 0.74% to 174.34, while Microsoft declined sharply by 2.74% to 372.49. Amazon also fell 1.13% to 207.76. However, not all stocks were down. Apple edged up 0.36% to 252.39, and Verizon gained 1.70% to 51.44, standing out among the few gainers.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a registered financial advisor in the respective jurisdiction.