S&P 500 Falls 0.4% Amid Middle East Tensions
SkimNews Take
Geopolitical risk is now doing the Fed's tightening work: elevated oil has repriced rate-cut expectations to zero despite Powell's reassurance, sustaining equity multiple compression as long as the conflict keeps energy prices sticky.
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- S&P 500 fell 0.40% (25.52 points) to close at 6,343.33.
- Nasdaq Composite dropped 0.73% (153.16 points) to 20,795.20.
- Dow Jones Industrial Average rose 0.12% (53.27 points) to 45,219.91.
- Trump warned the U.S. could open the Strait of Hormuz or strike Iranian oil facilities, while Iran called U.S. peace proposals unrealistic.
- Jerome Powell said longer‑term inflation expectations remain anchored despite the energy shock and that the Fed does not yet need a policy decision.
- CME Group’s FedWatch Tool shows markets have priced out any Fed rate cuts this year, reversing expectations of two cuts before the war.
- Department of Labor issued new guidelines for 401(k) trustees to add alternative assets, lifting the S&P 500 financial index and helping asset managers like Blackstone and KKR rise.
Why it matters: Investors see the war‑driven oil surge and the Fed’s reluctance to cut rates as headwinds, dragging down the S&P 500 and Nasdaq, while the Department of Labor’s 401(k) rule lifts financial stocks and boosts asset‑manager firms like Blackstone and KKR.
