US Stocks Today | Wall Street falls 2% as Middle East conflict stokes inflation worries

Wall Street‘s main indexes fell more than 2% on Tuesday, with the S&P 500 hitting its lowest in over two months, as investors braced for the impact of a widening Middle East conflict on oil prices, inflation and global trade.

Tehran’s threat to attack any vessel attempting to transit the Strait of ‌Hormuz, combined with ⁠production halts ⁠by several Middle Eastern oil and gas producers, has driven up global shipping rates and prices of crude and natural gas.

The strait, a critical chokepoint, carries roughly one-fifth of the world’s total oil consumption.

“Investors worry about additional inflation coming down the road. The main concern is that (oil prices) goes to over $100 a barrel and stays there,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.

“Hopefully this will be a quick and decisive war. But there are just a lot of questions, so I wouldn’t go out on a limb.”

Industries such as airlines and travel that are exposed to crude prices were knocked back for a ⁠second day. ‌Delta and Royal Caribbean fell about 3% and 4%, respectively.
At 09:50 a.m. ET, the Dow Jones Industrial Average fell 1,083.69 points, or 2.22%, to 47,821.09, the S&P 500 lost 141.91 points, or 2.06%, to 6,739.71 and the ⁠Nasdaq Composite lost 483.41 points, or 2.12%, to 22,265.45.The sell-off was broad and all major sectors on the S&P 500 were trading in the red.

Heavyweight technology stocks fell 1.9% with Nvidia slipping 1.7%, after gaining in the previous session.

The small-caps index slid 3.4%, while Wall Street’s fear gauge, the CBOE volatility index, spiked to a fresh three-month high of 27.30 points.

Meanwhile, alternative asset managers took a hit after a surge in redemption requests hit Blackstone’s flagship credit fund, BCRED.

Blackstone slid 7.7%, while Ares Management and Blue Owl Capital lost 4% each.

INFLATION TO WEIGH ON FED THINKING

Investors feared that the higher oil prices could fuel inflation and complicate central bank policy decisions already strained by tariff-driven ‌price increases.

The U.S. 10-year Treasury yield touched its highest level in more than a week and investors pushed back expectations for a 25-basis-point interest rate cut by the Federal Reserve to September from July, according to LSEG-compiled data. Prices of traditional safe-havens such as precious ⁠metals slid due to a stronger dollar. Miners tanked the most among S&P 500 sectors with a 4.2% drop.

Beyond geopolitics, investors are grappling with uncertainty over how disruptive AI models might be for traditional businesses, while also assessing volatility in the private credit market.

MongoDB’s shares plunged 26.3% after the database software company forecast quarterly profit below Street estimates.

Target shares gained 4.4% after new CEO Michael Fiddelke pledged a return to sales growth and issued an upbeat profit outlook, signaling a turnaround at the struggling retailer.

Declining issues outnumbered advancers by a 14.21-to-1 ratio on the NYSE and by a 8.21-to-1 ratio on the Nasdaq. The S&P 500 posted 10 new 52-week highs and three new lows while the Nasdaq Composite recorded 14 new highs and 110 new lows.