STORY: Wall Street’s main indexes ended lower on Tuesday, as investors exercised caution amid strife in the Middle East.
The Dow dropped four-tenths of a percent, the S&P 500 shed nearly a percent and the Nasdaq lost one-and-a-half percent.
Iran on Tuesday launched a salvo of ballistic missiles in retaliation for Israel’s campaign against Tehran’s Hezbollah allies.
Calling the event a “human tragedy,” Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, said markets nevertheless still remain more fixated on the Federal Reserve’s next move.
“From the market perspective, interestingly, we were down early in the day before this, and I think investors are really still focused on the Federal Reserve and the soft economic data we got this morning from the Purchasing Managers Survey. That said, as we watch this conflict unfold, I think the key question is, what happens if it starts to widen? [FLASH] The impact so far has been modest, and I think investors are going to be able to shrug this off for the moment as they focus more on the economic story which may be getting better in China and is really fairly solid here in the US.”
Data released on Tuesday showed U.S. job openings rebounded in August, while another report showed manufacturing activity continued to contract in September.
Traders slightly increased odds to just under 40% that the Fed will cut interest rates by another 50 basis points in November, according to CME’s FedWatch Tool.
While markets may be Fed-focused, some stocks reacted to the intensifying conflict in the Middle East.
Shares of Exxon Mobil rose more than 2% as oil prices jumped on supply concerns.
Defense stocks also rose, with Northrop Grumman and Lockheed Martin helping to push the S&P 500 aerospace and defense index to a record high.
And airline shares fell, including Delta, which closed down more than one-and-a-half percent.
