Wall Street drops following profit reports, and oil prices jump on war worries
Notice: Undefined variable: article_ad_placement3 in /usr/web/cs-washington.ogdennews.com/wp-content/themes/News_Core_2023_WashCluster/single.php on line 128
NEW YORK (AP) – Wall Street dropped Wednesday after rising Treasury yields tightened the vise further on the stock market and big U.S. companies delivered a mixed set of profit reports. Worries about war in the Middle East also dragged on the market.
The S&P 500 sank 1.3%. The Dow Jones Industrial Average dropped 332 points, or 1%, and the Nasdaq composite lost 1.6%.
Crude oil prices jumped sharply overnight following a deadly explosion at a hospital in the Gaza Strip, which sparked protests across the Middle East. Gold, meanwhile, rose as investors continue to look for safer investments following the Oct. 7 surprise attack on Israel by Hamas.
Yields have climbed as the U.S. economy has remained remarkably resilient, even after the Federal Reserve raised its main interest rate to the highest level since 2001. That strength has a large group of investors believing the Fed may pull off the balancing act of slowing the economy through high rates just enough to smother high inflation but not so much as to cause a painful recession.
Still, investors remain cautious. Global fund managers are holding more cash to protect themselves, up to 5.3% of their total portfolios in October from 4.9%, according to the latest survey by Bank of America.
A big threat for the global economy is what oil prices do to inflation amid the latest war between Hamas and Israel.
In the oil market, a barrel of U.S. crude climbed $1.66 to settle at $88.32 per barrel. It approached $90 early in the morning before paring its gain. Brent crude, the international standard, rose $1.60 to $91.50 after earlier nearing $93 per barrel.
The spark for the jump was a blast at a Gaza hospital that reportedly killed hundreds. Hamas blamed it on an Israeli airstrike, while the Israeli military blamed a rocket misfired by members of another Palestinian militant group. President Joe Biden seemed to suggest it wasn’t Israel.
The fear in financial markets is that the war will draw in big oil-producing nations, such as Iran, and lead to disruptions of supply.
Iranian Foreign Minister Hossein Amirabdollahian called on Muslim nations Wednesday to launch an oil embargo on Israel after the explosion at the hospital.
Gold rose $32.60 to settle at $1,968.30 per ounce as investors looked for safer things to own.
In stock markets abroad, indexes slumped in much of Europe after ending mixed in Asia.
China reported Wednesday that its economy grew at a 4.9% annual pace from July through September. That’s down from 6.3% growth in the previous quarter but better than economists feared for the world’s second-largest economy.
AP Business Writers Matt Ott, Elaine Kurtenbach and Zen Soo contributed.