Wall Street dips as Middle East tensions rise; Boeing drops
NEW YORK: Wall Street's main indexes slipped on Thursday as signs of rising tensions in the Middle East hurt risk sentiment and investors sought more clarity on Washington's recent trade deals with China.
Boeing declined 4.7 per cent after an Air India 787-8 Dreamliner jet crashed minutes after taking off in India's western city of Ahmedabad, killing more than 200 people.
Underscoring increased volatility in the Middle East, President Donald Trump said on Wednesday US personnel were being moved out of the region as it could be a "dangerous place" and the United States would not allow Iran to have a nuclear weapon.
"The clearing out of our embassies in the Middle East of non-essential employees sends a signal that we're anticipating some turbulent times," said Kim Forrest, chief investment officer at Bokeh Capital Partners.
A senior Iranian official said on Wednesday Tehran will strike US bases in the region if nuclear negotiations fail and conflict arises.
China on Thursday affirmed a trade deal with the US, saying both sides needed to abide by the consensus. Traders are still waiting for more details on the trade framework discussed.
At 10:06 a.m. ET, the Dow Jones Industrial Average fell 140.49 points, or 0.33 per cent, to 42,725.28, the S&P 500 lost 5.58 points, or 0.09 per cent, to 6,017.36 and the Nasdaq Composite lost 39.52 points, or 0.20 per cent, to 19,576.35.
Five of the 11 major S&P 500 sub-sectors fell. Communication services dropped the most, with an about 0.7 per cent decline, while utilities gained 0.8 per cent.
Alphabet declined 1.1 per cent, while Nvidia nudged 0.3 per cent higher.
Among other movers, Oracle shares rose 12.1 per cent after the cloud service provider raised its annual revenue growth forecast.
US-listed shares of gold miners also advanced, as bullion prices hit a one-week high. Newmont gained 2.4 per cent, Harmony Gold was up 2.1 per cent and AngloGold Ashanti rose 5.2 per cent.
After a tame consumer price report on Wednesday, softer-than-expected producer price data and largely unchanged initial jobless claims helped reduce investor jitters around tariff-driven price pressures.
Traders are pricing in 53.7 basis points of rate cuts by year-end, per data compiled by LSEG. They are penciling in a 60 per cent chance of a 25 bps cut in September, according to the CME Group's FedWatch tool.
Policymakers are widely expected to keep rates unchanged next week.
With investors increasingly expecting Trump to reach favorable trade agreements with several countries in the coming weeks, the benchmark S&P 500 index is just 2.1 per cent below its record high touched in February.
The tech-heavy Nasdaq is about 2.9 per cent from record levels hit in December.
Goldman Sachs trimmed its US recession probability to 30 per cent from 35 per cent on easing uncertainty around Trump's tariff policies.
Declining issues outnumbered advancers by a 1.35-to-1 ratio on the NYSE and by a 2.03-to-1 ratio on the Nasdaq.
The S&P 500 posted four new 52-week highs and three new lows while the Nasdaq Composite recorded 24 new highs and 39 new lows. (Reporting by Kanchana Chakravarty and Sukriti Gupta in Bengaluru; Editing by Devika Syamnath)
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