Wall Street Drops on Iran Tension, Private Credit Woes
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- US equities fell with the Dow off 0.67% to 45,900.53, S&P 500 down 0.62% to 6,540.44, and Nasdaq down 0.83% to 21,765.37 at 10:02 a.m. ET, per the source's intraday data
- Trump postponed his Iran decision citing "productive talks," but Tehran denied any negotiations took place and Israeli officials said any deal was unlikely to succeed at this point
- Ares Management and Apollo Global Management shares dropped 2.7% and 3.1% after capping redemptions at 5% at their private credit funds, mirroring moves by BlackRock and Morgan Stanley earlier this month
- S&P 500 financials lost 0.7% while energy gained 1.7% on higher oil prices; peers Blackstone and Blue Owl Capital slipped over 2% each and KKR fell 3.5%
- Money markets fully unwound 2026 rate-cut bets, pricing in zero reductions versus two expected before the Middle East conflict erupted, per CME's FedWatch Tool
- Barclays raised its 2026 S&P 500 year-end target to 7,650 from 7,400, citing stronger earnings expectations that outweigh macro risks including private credit stress
- Jefferies gained 3.3% on FT reports that Sumitomo Mitsui Financial Group is working on a possible takeover; Janus Henderson added 3.3% after Trian Capital and General Catalyst raised their offer to $52/share from $49
Why it matters: Private credit redemption caps at Ares and Apollo signal real liquidity strain in alternative lending, dragging alternative asset managers (KKR -3.5%, Blackstone and Blue Owl each over -2%) while energy bucked the broader selloff on oil's surge. The simultaneous repricing of Fed expectations to zero 2026 cuts from two pre-conflict underscores how quickly the Middle East has redrawn this year's macro playbook, even as Barclays still raised its year-end S&P 500 target.
