NEW YORK: Wall Street’s main indexes edged lower on Wednesday, with the financials-heavy Dow leading declines as investors assessed a key inflation report and weighed the outlook for crude prices amid rising tensions in the Middle East.
The International Energy Agency agreed to release an unprecedented amount of crude oil reserves in an attempt to temper soaring energy prices. However, crude prices jumped 4 percent as shipping through the strategic Strait of Hormuz is likely to be halted for a while.
“The release of barrels is not a permanent fix,” said Sam Stovall, chief investment strategist at CFRA Research.
“Investors continue to be worried about the actions of Iran and the impact on oil shipments going through the Strait of Hormuz. Until the war has ended and ships can move smoothly through the Strait, we will continue to see volatility in oil prices.”
Meanwhile, investors were also monitoring developments in the private credit space after reports said JPMorgan Chase marked down the value of certain loans held by private-credit groups and was tightening its lending to the sector.
Asset managers such as Blue Owl Capital and Ares Management dropped over 5 percent each and jitters were felt across the financials sector.
The S&P 500 financials sector fell for the fifth-straight day and was last down 1.6 percent at its lowest since May.
At 12:06 p.m. ET, the Dow Jones Industrial Average fell 481.30 points, or 1.01 percent, to 47,225.21, the S&P 500 lost 31.06 points, or 0.46 percent, to 6,750.42 and the Nasdaq Composite lost 58.90 points, or 0.26 percent, to 22,638.20.
The focus was also on a Labor Department report that showed expectations of higher gasoline costs in anticipation of an escalating war in the Middle East had reflected in consumer prices in February.
Following the data, investors pushed back expectations for a 25-basis-point interest rate cut by the Federal Reserve to October from September earlier, according to LSEG-compiled data.
Spiking oil costs along with signs of a softening jobs market are likely to further complicate the central bank’s monetary policymaking. S&P 500 energy stocks gained 1.8 percent.
Against this backdrop, President Donald Trump told media firm Axios that there is “practically nothing left” to target in Iran and that the war there will end soon.
Wall Street’s fear gauge, the CBOE volatility index, see-sawed and was last up 0.87 points at 25.8.
Among stocks, Oracle predicted that the AI data center boom will power its revenue above estimates well into 2027, sending its shares up 10.4 percent.
Crude-price-sensitive travel stocks such as Delta and cruise liner Carnival were marginally lower.
Campbell’s fell 7.7 percent after cutting its annual forecasts and warned of increasing pressure in the second half of the year from the revised US tariffs.
Defense company AeroVironment dropped 7.1 percent after forecasting 2026 adjusted profit below estimates.
Declining issues outnumbered advancers by a 2.39-to-1 ratio on the NYSE and by a 1.83-to-1 ratio on the Nasdaq.
The S&P 500 posted two new 52-week highs and 11 new lows, while the Nasdaq Composite recorded 37 new highs and 86 new lows.
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