More turmoil appeared in the stock market as Middle Eastern conflicts continue, further boosting oil prices. The risk associated with the armed conflict with Iran is inflation, as a longer-lasting conflict threatens persistently higher energy prices—an issue that could halt Federal Reserve rate cuts this year. The options market has already priced in a significant chance that there will be no more rate cuts in 2026.
All major U.S. stock indices suffered losses. The Dow Jones Industrial Average posted a relatively steep loss, declining 785 points to 47,955. The NASDAQ, on the other hand, slid only 0.29% to 25,020. The S&P 500 retreated 0.56% to 6,831. Most sectors ended the day with losses; industrials, materials, consumer staples, and healthcare each dipped more than 2%.
The bond market also threw a tantrum, with yields moving upward across the yield curve. Both the U.S. 5-year Treasury yield and the 10-year yield rose 6 basis points to 3.73% and 4.14%, respectively. Gold also slipped below the 5,100 mark.
Oil prices have risen significantly, moving above 78 dollars per barrel, potentially causing a significant disruption to the global supply chain if the situation does not ease anytime soon.
On a brighter note, today’s U.S. jobless claims continue to show stability in a low-firing environment. Last quarter’s productivity was also significantly higher than expected. Import prices surprised to the downside—all of which demonstrate a resilient U.S. economy and a favorable environment over the past few months.
There will be the monthly jobs report tomorrow, an important gauge of the state of the economy, and we will keep you updated. Thank you for listening. This is Adams Wealth Advisor.