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US stocks end sharply lower, crude jumps on Middle East tensions

Published Oct 17, 2023 08:27PM ET Updated Oct 18, 2023 04:27PM ET
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© Reuters. A passerby walks past an electric monitor displaying various countries' stock price index outside a bank in Tokyo, Japan, March 22, 2023. REUTERS/Issei Kato/File photo

By Stephen Culp

NEW YORK (Reuters) - Wall Street stocks tumbled and crude prices surged on Wednesday as escalating Middle East turmoil prompted a broad sell-off and stoked oil supply concerns.

All three major U.S. stock indexes shed 1% or more, closing near session lows. Momentum stocks, led by Nvidia (NASDAQ:NVDA), Tesla (NASDAQ:TSLA) Inc and Amazon.com (NASDAQ:AMZN), pulled the tech-heavy Nasdaq down 1.6%.

U.S. President Joe Biden arrived in Israel after an attack on a hospital in the Gaza Strip derailed plans for a diplomatic summit with Arab leaders as the Israel-Hamas conflict continued unabated.

Adding to headwinds, Nvidia revealed details regarding the extent to which U.S. restrictions on chip exports to China could potentially affect its sales.

"The lack of certainty around the potential for escalation in the Middle East has a direct relationship with oil, which has downstream implications and could impact earnings," said Greg Bassuk, chief executive at AXS Investments in New York.

"Investors have moved to a risk-off mentality on the combination of the war in Israel, uncertainty around chips and earnings, and Fed policy all taken together," Bassuk added. "These themes will be the investor narrative for the upcoming days, resulting in this see-saw market of ups and downs."

A string of quarterly profit beats, specifically from Morgan Stanley and Procter & Gamble (NYSE:PG), along with a sharp rebound in U.S. housing starts, failed to stir much upside sentiment.

Elsewhere, Beijing reported that China's GDP grew at a faster-than-expected pace in the third quarter, suggesting the recovery of the world's second-largest economy is gaining traction.

The Dow Jones Industrial Average fell 332.57 points, or 0.98%, to 33,665.08, the S&P 500 lost 58.6 points, or 1.34%, at 4,314.6 and the Nasdaq Composite dropped 219.45 points, or 1.62%, to 13,314.30.

European stocks slid, ending down 1.1% due to deepening fears over the Middle East conflict and as a downbeat forecast for the semiconductor sector weighed on sentiment.

The pan-European STOXX 600 index lost 1.05%, and MSCI's gauge of stocks across the globe shed 1.26%.

Emerging market stocks lost 0.95%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.66% lower, while Japan's Nikkei rose 0.01%.

Oil prices advanced as the mounting strife in the Middle East appeared to pose a growing threat to supply.

U.S. crude rose 1.92% to settle at $88.32 per barrel, while Brent settled at $91.50 per barrel, up 1.78% on the day.

U.S. benchmark Treasury yields touched more than 16-year highs, continuing their uphill climb after a sharp rebound in U.S. homebuilding pointed to economic resiliency.

Benchmark 10-year notes last fell 15/32 in price to yield 4.9106%, from 4.847% late on Tuesday.

The 30-year bond last fell 17/32 in price to yield 4.9892%, from 4.951% late on Tuesday.

The greenback advanced against a basket of world currencies as market participants kept a watchful eye on developments in the Middle East.

The dollar index rose 0.31%, with the euro down 0.41% to $1.0532.

The Japanese yen weakened 0.04% versus the greenback at 149.91 per dollar, while Sterling was last trading at $1.214, down 0.31% on the day.

Gold jumped to a more than two-month peak as demand for the safe-haven metal was boosted by the uncertainties surrounding the Israel-Hamas conflict.

Spot gold added 1.3% to $1,948.42 an ounce.

US stocks end sharply lower, crude jumps on Middle East tensions
 

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Comments (3)
Maximus Maximus
Maximus Maximus Oct 18, 2023 8:06PM ET
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if the palestinians had been given a chance of a life of dignity, freedom, peace, and prosperity by israel, then hamas would have had little or no support.. that's the beginning and the end of this decades long conflict.
Tom Scheuermann
Tom Scheuermann Oct 18, 2023 5:19AM ET
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you gotta love the middle East.....Hamas goes into to Israel and goes house to house and takes hostages and does unmentionable things to Jewish people and nobody in the Arab world cares but then they protest Israel and call them war criminals when a hospital gets blown up...without proof they even did it and it's looking more like they didn't. but ya, the double standard rooted in just racism is something to see
Derick Lim
Derick Lim Oct 18, 2023 5:19AM ET
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The world evolve around their fanatic mind and religion...
Maximus Maximus
Maximus Maximus Oct 18, 2023 5:19AM ET
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tom, stop talking about things you clearly have no idea about.. these are but the latest in a many decades long conflict with immentionable atrocities committed by both sides..
Chris Johnson
Chris Johnson Oct 18, 2023 3:50AM ET
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And all Chinese data a little better than expected... as if LOL Good luck basing your investment decision on those numbers...
 
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