The New York Stock Exchange is trading lower on Tuesday, the fourth day of the Israeli-American conflict with Iran, driven by fears of a prolonged war in the Middle East and its impact on the US economy.
At around 3:15 pm GMT (4:00 pm Paris time), the Dow Jones was down 2.22%, the Nasdaq index was down 2.13%, and the broader S&P 500 index was down 2.07%.
According to Steve Sosnick of Interactive Brokers, American investors are reacting differently to the geopolitical headlines, realizing that the situation may not be resolved quickly and could have significant international repercussions.
Meanwhile, Iran is targeting US-related sites in the Gulf, responding to the unprecedented war launched by Israel and the United States.
Concerns about the inflationary impact of the war on the US economy are mounting, with worries about higher operating costs and a possible slowdown in consumer spending.
Analysts also mention potential impacts on company profits due to increased operating costs and potential slowdowns in consumer spending.
The Federal Reserve may pause rate cuts or even raise them, further affecting the American market. Wall Street generally welcomes monetary easing to boost business growth.
In the American bond market, interest rates continue to rise, with the 10-year yield reaching 4.10% and the two-year yield increasing to 3.55%.
Investors are watching closely to see if they will continue bargain hunting or maintain a cautious approach throughout the session. Most stocks are in the red, including major companies in the technology sector like Nvidia, Alphabet, Amazon, and Microsoft.
Even energy and defense sectors, which performed well previously, are facing challenges. Companies like Lockheed Martin, RTX, Northrop Grumman, Exxon, Chevron, and ConocoPhillips are seeing declines.
The geopolitical situation is overshadowing corporate earnings for the day. Retail giants like Target and Best Buy are holding up in the market despite mixed quarterly results.
Overall, the stock market is reacting to the ongoing Middle East conflict and its potential impact on the global economy.
