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Yahoo
9 hours ago
- Business
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Investors see quick stock market drop if US joins Israel-Iran conflict
By Noel Randewich (Reuters) -Financial markets may be in for a "knee-jerk" selloff if the U.S. military attacks Iran, with economists warning that a dramatic rise in oil prices could damage a global economy already strained by President Donald Trump's tariffs. Oil prices fell nearly 2% on Wednesday as investors weighed the chance of supply disruptions from the Israel-Iran conflict and potential direct U.S. involvement. The price of crude remains up almost 9% since Israel launched attacks against Iran last Friday in a bid to cripple its ability to produce nuclear weapons. With major U.S. stock indexes trading near record highs despite uncertainty about Trump's trade policy, some investors worry that equities may be particularly vulnerable to sources of additional global uncertainty. Chuck Carlson, chief executive officer at Horizon Investment Services, said U.S. stocks might initially sell off should Trump order the U.S. military to become more heavily involved in the Israel-Iran conflict, but that a faster escalation might also bring the situation to an end sooner. "I could see the initial knee-jerk would be, 'this is bad'," Carlson said. "I think it will bring things to a head quicker." Wednesday's dip in crude, along with a modest 0.3% increase in the S&P 500, came after Trump declined to answer reporters' questions about whether the U.S. was planning to strike Iran but said Iran had proposed to come for talks at the White House. Adding to uncertainty, Iranian Supreme Leader Ayatollah Ali Khamenei rejected Trump's demand for unconditional surrender. U.S. Treasury yields fell as concerns over the war in Iran boosted safe haven demand for the debt. The U.S. military is also bolstering its presence in the region, Reuters reported, further stirring speculation about U.S. intervention that investors fear could widen the conflict in an area with critical energy resources, supply chains and infrastructure. With investors viewing the dollar as a safe haven, it has gained around 1% against both the Japanese yen and Swiss franc since last Thursday. On Wednesday, the U.S. currency took a breather, edging fractionally lower against the yen and the franc. 'I don't think personally that we are going to join this war. I think Trump is going to do everything possible to avoid it. But if it can't be avoided, then initially that's going to be negative for the markets,' said Peter Cardillo, Chief Market Economist at Spartan Capital Securities in New York. "Gold would shoot up. Yields would probably come down lower and the dollar would probably rally." Barclays warned that crude prices could rise to $85 per barrel if Iranian exports are reduced by half, and that prices could rise about $100 in the "worst case" scenario of a wider conflagration. Brent crude was last at about $76. Citigroup economists warned in a note on Wednesday that materially higher oil prices "would be a negative supply shock for the global economy, lowering growth and boosting inflation—creating further challenges for central banks that are already trying to navigate the risks from tariffs." Trump taking a "heavier hand" would not be a surprise to the market, mitigating any negative asset price reaction, Carlson said, while adding that he was still not convinced that the U.S. would take a heavier role. Trades on the Polymarket betting website point to a 63% expectation of "U.S. military action against Iran before July", down from as much as an 82% likelihood on Tuesday, but still above a 35% chance before the conflict began last Friday. The S&P 500 energy sector index has rallied over 2% in the past four sessions, lifted by a 3.8% gain in Exxon Mobil and 5% rally in Valero Energy. That compares to a 0.7% drop in the S&P 500 over the same period, reflecting investor concerns about the impact of higher oil prices on the economy, and about growing global uncertainty generated by the conflict. Turmoil in the Middle East comes as investors are already fretting about the effect of Trump's tariffs on the global economy. The World Bank last week slashed its global growth forecast for 2025 by four-tenths of a percentage point to 2.3%, saying that higher tariffs and heightened uncertainty posed a "significant headwind" for nearly all economies. Defense stocks, already lifted by Russia's conflict with Ukraine, have made modest gains since Israel launched its attacks. The S&P 500 Aerospace and Defense index hit record highs early last week in the culmination of a rebound of over 30% from losses in the wake of Trump's April 2 "Liberation Day" tariff announcements. Even after the latest geopolitical uncertainty, the S&P 500 remains just 2% below its February record high close. "Investors want to be able to look past this, and until we see reasons to believe that this is going to be a much larger regional conflict with the U.S. perhaps getting involved and a high chance of escalating, you're going to see the market want to shrug this off as much as it can,' Osman Ali, global co-head of Quantitative Investment Strategies, said at an investor conference on Wednesday.
Yahoo
28-03-2025
- Automotive
- Yahoo
S&P 500 ends lower as investors digest Trump's auto tariffs
By Noel Randewich (Reuters) -The S&P 500 ended lower on Thursday, as investors grappled with U.S. President Donald Trump's latest trade tariff announcement that hit shares of General Motors and Ford. Trump unveiled on Wednesday his plan to implement a 25% tariff on imported cars and light trucks effective on April 3, while the duty on auto parts begins on May 3. Investors are also bracing for a wave of reciprocal tariffs Trump plans to unveil on Wednesday, although the president has hinted there may be room for flexibility. In a volatile session on Wall Street, General Motors tumbled over 7% and Ford slid 3.9%. Car parts manufacturers Aptiv and BorgWarner each lost around 5%. Tesla edged up 0.4%, with investors betting the electric vehicle maker will be hurt less by tariffs because of its largely domestic production. Apple added 1.05%, helping limit the S&P 500's loss. Trump's mercurial trade policies have created uncertainty on Wall Street, as investors fret over potential disruptions to supply chains, hampered investment, and the specter of inflation threatening global economic growth. "Investors are really cautious and wary of Trump and his policies. Even more than the policies, just the constant flip-flopping," said Jed Ellerbroek, a portfolio manager at Argent Capital in St. Louis, Missouri. "That makes people really nervous to make long-term investment decisions, whether we're talking about companies or about investors." The S&P 500 declined 0.33% to end the session at 5,693.31 points. The Nasdaq dropped 0.53% to 17,804.03 points, while the Dow Jones Industrial Average declined 0.37% to 42,299.70 points. Of the 11 S&P 500 sector indexes, eight declined, led lower by energy, down 0.85%, followed by a 0.84% loss in communication services. The number of Americans filing new applications for unemployment benefits slipped last week, while the jobless rate appeared to have held steady in March. Also on Thursday, the headline figure for fourth-quarter gross domestic product growth was revised to 2.4%, higher than the consensus estimate of 2.3% in a Reuters poll. Shares of Dollar Tree jumped 11% as several analysts raised their price targets after the discount retailer on Wednesday said it sold its struggling Family Dollar business for about $1 billion. Investors on Friday will focus on the February personal consumption expenditures price index — the Federal Reserve's favored inflation gauge. Traders have trimmed their exposure to U.S. equities, with the S&P 500 down about 7% from its record high close on February 19. The Nasdaq is down almost 12% from its record high close on December 16. The S&P 500 and Nasdaq are both on course to conclude the first quarter of 2025 in negative territory. So far in 2025, the S&P 500 has lost about 3% and the Nasdaq is down almost 8%. Fed policymakers Susan Collins and Thomas Barkin are expected to share their economic insights later on Thursday. Declining stocks outnumbered rising ones within the S&P 500 by a 1.3-to-one ratio. The S&P 500 posted 15 new highs and seven new lows. The Nasdaq recorded 34 new highs and 195 new lows. Volume on U.S. exchanges was relatively light, with 14.7 billion shares traded, compared to an average of 16.3 billion shares over the previous 20 sessions.
Yahoo
24-03-2025
- Business
- Yahoo
S&P 500 ends sharply higher, Nvidia and Tesla rally
By Noel Randewich (Reuters) - The S&P 500 rose sharply to end at its highest in over two weeks on Monday, lifted by Nvidia and Tesla following signs that the Trump administration might take a more measured approach on tariffs against U.S. trading partners. U.S. President Donald Trump had anticipated applying broad levies starting on April 2, but a set of sector-specific tariffs is now likely to be excluded, according to media reports over the weekend citing administration officials. A Trump administration official on Monday cautioned that the situation was fluid and no final decisions had been made. Investors scooped up battered technology shares, with Nvidia rallying over 3% and Advanced Micro Devices jumping 7%, sending the PHLX chip index 3% higher. Tesla surged almost 12% in its biggest one-day gain since early November, recovering some of its recent steep decline, helped by optimism about scaled-back U.S. tariffs. Financial markets have been volatile in recent weeks due to fears of inflation and an economic downturn after Trump announced a series of tariffs last month on major U.S. trading partners, including China, Mexico and Canada. The S&P 500 has recovered about 4% from its recent low on March 13, and it remains down around 6% from its February 19 record high close. "Investors are experiencing a slight sigh of relief, but at the same time they are cynical about how long this may last," said Sam Stovall, chief investment strategist at CFRA Research. "The causes of this manufactured correction have not evaporated. They are tariffs and what the impact of tariffs could be on economic growth, inflation and corporate profits." Several companies have cited tariff uncertainty as they lowered their forecasts for upcoming quarters. Data compiled by LSEG as of Friday showed earnings of companies in the S&P 500 are expected to grow by 10.5% in 2025, down by 3.5 percentage points since the beginning of the year. The S&P 500 climbed 1.76% to end the session at 5,767.57 points. The Nasdaq gained 2.27% to 18,188.59 points, while the Dow Jones Industrial Average rose 1.42% to 42,583.32 points. The domestically focused Russell 2000 index rose 2.55% to a two-week high, while the CBOE Volatility Index, known as Wall Street's fear gauge, dropped 1.8 points to a one-month low. Volume on U.S. exchanges was relatively light, with 13.6 billion shares traded, compared to an average of 16.5 billion shares over the previous 20 sessions. Ten of the 11 S&P 500 sector indexes rose, led by consumer discretionary, up 4.07%, lifted by Tesla, followed by a 2.1% gain in communication services. A survey showed U.S. business activity picked up in March, while growing fears over import tariffs and deep government spending cuts continued to weigh on sentiment. Investors are awaiting data this week, including the Personal Consumption Expenditure (PCE) price index - the Federal Reserve's preferred inflation gauge - on Friday. Dun & Bradstreet climbed 3% after the data and analytics provider agreed to be acquired by private equity firm Clearlake Capital in a $7.7 billion deal. Lockheed Martin fell over 1% after BofA Global Research downgraded the weapons maker to "neutral" from "buy". Crypto stocks rallied with a 4% rise in bitcoin prices, with MicroStrategy surging 10% and Coinbase adding 7%. Advancing issues outnumbered falling ones within the S&P 500 by a 5.4-to-one ratio. The S&P 500 posted 5 new highs and 1 new lows; the Nasdaq recorded 46 new highs and 97 new lows.
Yahoo
28-02-2025
- Business
- Yahoo
S&P 500 ends down as Nvidia tumbles following report
By Noel Randewich and Johann M Cherian (Reuters) - The S&P 500 and Nasdaq ended sharply lower on Thursday, weighed down by a slump in chipmaker Nvidia after its quarterly report failed to rekindle Wall Street's AI rally, while investors focused on data pointing to a cooling U.S. economy. Nvidia tumbled 8.5%, evaporating $274 billion in stock market value, after the Silicon Valley company gave a weaker-than-expected quarterly forecast for gross margin that overshadowed an upbeat revenue outlook. Chipmakers Broadcom dropped more than 7% and Advanced Micro Devices lost 5%, pulling the Philadelphia chip index down 6.1%. The launch of low-cost artificial intelligence models from China's DeepSeek in January has cooled Wall Street's AI rally, while an analyst report this week suggesting Microsoft was scrapping some data center leases also raised concerns of AI overcapacity. With Nvidia's results and outlook failing to impress investors with high expectations, its stock has now fallen almost 20% from its record-high close on January 6. "Nvidia's earnings were good, but not like the blockbuster earnings that they've been delivering for a while," said Scott Welch, chief investment officer at Certuity. The S&P 500 dropped 1.59% to end the session at 5,861.57 points. The Nasdaq tumbled 2.78% to 18,544.42 points, while the Dow Jones Industrial Average declined 0.45% to 43,239.50 points. It was the Nasdaq's deepest one-day percentage drop in a on U.S. exchanges was heavy, with 15.8 billion shares traded, compared to an average of 15.3 billion shares over the previous 20 sessions. The Cboe Volatility Index, Wall Street's "fear gauge" closed at its highest since December 19. While tech stocks dipped, other parts of the market saw gains. The S&P energy index rose 0.5%, tracking a jump in crude prices after U.S. President Donald Trump canceled oil major Chevron's license to operate in Venezuela. Also weighing on investor sentiment, data showed jobless claims jumped more than expected in the previous week, while another report reiterated that economic growth slowed in the fourth quarter. Thursday's data follows reports over the past week that suggested the economy was stalling, fears of which have also put all three major U.S. indexes on track for monthly declines. "We're now seeing inflation fears give way to growth fears, and that, in turn, is causing stocks to go, at best, sideways, and potentially even down," said Michael Green, chief strategist at Simplify Asset Management in Philadelphia. On the trade front, Trump floated a 25% reciprocal tariff on European cars and other goods. He also said tariffs on Mexico and Canada will go into effect on Tuesday. Investors are focused on monthly Personal Consumption Expenditure data, which is the Federal Reserve's preferred inflation gauge, due on Friday. Traders expect the Fed to lower borrowing costs by at least 50 basis points by December, according to data compiled by LSEG. Shares of Salesforce dropped 4% after the business software seller forecast fiscal 2026 revenue below expectations. Snowflake surged 4.5% after the data analytics provider forecast fiscal 2026 product revenue above estimates. Viatris plummeted 15% after the drugmaker forecast downbeat annual results. Warner Bros Discovery jumped 4.8% after saying it expects streaming profits to double this year. Declining stocks outnumbered rising ones within the S&P 500 by a 1.7-to-one ratio. The S&P 500 posted 20 new highs and 13 new lows; the Nasdaq recorded 42 new highs and 269 new lows. Sign in to access your portfolio
Yahoo
15-02-2025
- Business
- Yahoo
Wall Street ends mixed; Nvidia lifts Nasdaq
By Noel Randewich and Sukriti Gupta (Reuters) - Wall Street stocks ended mixed on Friday, with Nvidia climbing and Microsoft dipping, while Treasury yields declined a day after U.S. President Donald Trump unveiled reciprocal tariff plans but stopped short of imposing new ones. Yields across government bonds slipped for a second straight day after data showed U.S. retail sales fell more than expected in January, dropping 0.9% last month after an upwardly revised 0.7% increase in December. The yield on the 10-year note fell about 7 basis points, last at 4.44%. The Nasdaq 100, which is made up of the Nasdaq exchange's most valuable companies, rose 0.4% and notched a record-high close. Nvidia added 2.6%, while Apple moved 1.3% higher. Microsoft dipped about 0.5% and Amazon slid 0.7%. Trump tasked his economics team on Thursday to devise plans for reciprocal tariffs on every country taxing U.S. imports, although the directive stopped short of imposing fresh tariffs. Howard Lutnick, Trump's pick for commerce secretary, said the administration would address affected countries individually and said studies of the issue would be completed by April 1. The imposition of tariffs on steel and aluminum imports, a bigger-than-expected rise in January's consumer prices and hawkish comments from Federal Reserve Chair Jerome Powell added to market volatility this week. "It's all about Trump right now. All the other stuff is just noise," said Dennis Dick, a trader at Triple D Trading in Ontario, Canada. "What everyone is focused on is, 'What is Trump going to do next, and where are his tariff wars going?'" Stocks received a boost earlier this week after data showed U.S. producer prices increased in January, while key elements in the core Personal Consumption Expenditures index, a measure closely tracked by the Fed, were benign or lower. Traders are pricing in at least one 25 basis-point interest rate cut by the end of the year, with a roughly 50% chance of an additional cut, according to LSEG data. The S&P 500 edged down 0.01% to end the session at 6,114.63 points. The Nasdaq gained 0.41% to 20,026.77 points, while the Dow Jones Industrial Average declined 0.37% to 44,546.08 points. Of the 11 S&P 500 sector indexes, seven declined, led lower by consumer staples, down 1.16%, followed by a 1.11% loss in healthcare. Volume on U.S. exchanges was relatively light, with 14.4 billion shares traded, compared with an average of 15.0 billion shares over the previous 20 sessions. For the week, the S&P 500 rose 1.5%, while the Nasdaq gained 2.6% and the Dow added 0.5%. Airbnb jumped 14% after the vacation home rentals company posted higher quarterly revenue. DaVita dropped 11% after the dialysis firm projected annual profit below estimates. Warren Buffett's Berkshire Hathaway also sold some of its shares in the company. Applied Materials fell 8% after the chipmaking equipment maker forecast second-quarter revenue below estimates. U.S. markets will be closed on Monday for the Presidents Day holiday. Declining stocks outnumbered rising ones within the S&P 500 by a 1.3-to-one ratio. The S&P 500 posted 37 new highs and 7 new lows; the Nasdaq recorded 131 new highs and 83 new lows. Sign in to access your portfolio
