Wall St falls as Israel's strikes on Iran erode risk appetite
NEW YORK: Wall Street's main indexes fell on Friday after Israel struck a series of nuclear facilities and missile factories in Iran, escalating tensions in the oil-rich Middle East and undermining global investor confidence.
Israel's attacks were aimed at preventing Tehran from building an atomic weapon, while Iran has promised harsh reprisals.
Oil prices surged nearly 7% on fears the conflict could disrupt crude supply from the Middle East. US energy stocks rose in tandem, with Exxon up 1.7% and Diamondback Energy rising 3.2%.
Airline stocks dropped on fears that fuel costs could surge if bottlenecks squeezed supply. Delta Air Lines was down 2.1%, United Airlines fell 2.6% and American Airlines declined 3.2%.
Defense stocks climbed, with Lockheed Martin up 3.4%, RTX Corporation gaining 3.3% and Northrop Grumman rising 3.5%.
'I think the market understands that this is a continuation of the war between Iran and Israel... I don't think the market expects it to escalate too dramatically from here,' said Jed Ellerbroek, portfolio manager at Argent Capital Management.
At 11:38 a.m. ET, the Dow Jones Industrial Average fell 453.51 points, or 1.06%, to 42,514.11, the S&P 500 lost 32.29 points, or 0.53%, to 6,012.97, and the Nasdaq Composite dropped 127.05 points, or 0.65%, to 19,535.43.
Eight of the 11 major S&P 500 sub-sectors fell. Energy stocks gained 1.3%, while financials was the worst hit with a 1.5% drop.
The S&P 500 and the Nasdaq were set to log their third week of gains, while the Dow was on track for its first weekly loss in three weeks.
Photoshop-maker Adobe fell 5.2% despite raising its full-year results forecast.
Most megacap and growth stocks declined. Nvidia was 1.5% lower and Apple lost 0.8%.
Visa shares hit a more than four-week low and were last down 5.2%.
Shares of Boeing fell nearly 2%, weighing on the blue-chip Dow.
US-listed shares of gold miners rose tracking an increase in bullion prices. Newmont gained 2.4%, while AngloGold Ashanti added 3.1%.
The S&P 500 was 2.1% below its record high reached earlier this year, after upbeat corporate earnings and a softening in US President Donald Trump's trade stance drove stellar monthly gains in May.
The tech-heavy Nasdaq is about 3.2% off its record closing high reached in December last year.
A tame consumer price report, softer-than-expected producer price data and largely unchanged initial jobless claims earlier this week helped calm investor jitters around tariff-driven price pressures. However, US Federal Reserve policymakers are widely expected to keep interest rates unchanged at their meeting next week.
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