The broad-based S&P 500 fell 0.5 percent to 6,845.44, while the tech-rich Nasdaq Composite Index fell 0.4 percent to 22,575.52.The Israeli military said it had launched a new “broad attack” on Tehran, as Gulf monarchies threatened to retaliate and tankers were attacked off the coast of Oman.
Oil prices rose by about eight percent.
“If oil prices remain high, that means inflation could move higher,” Adam Sarhan said, noting that such a move would likely delay or end the chance of further rate cuts from the Federal Reserve.
“If this conflict spreads (…) and causes prolonged unrest in the Middle East, it will not be a good sign for the market,” Sarhan added. But Briefing.com analyst Patrick O’Hare characterized the stock market’s reaction so far as relatively muted.
“The major indices will open lower, but they will not open lower relative to the weight of the combat news because participants are not yet convinced that the military action will fuel disorder for the global economy,” O’Hare said.
Among sectors, airline and travel stocks retreated, while shares of defense companies and petroleum producers edged higher.
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