Wall Street’s main indices have tumbled in the last session of a holiday-truncated week after US President Donald Trump signalled more aggressive attacks on Iran, dampening expectations for a swift end to the Middle East conflict.
During a prime time address on Wednesday, Trump said military operations would be intensified in the next two to three weeks, in a sharp reversal from his earlier comments that the US will be “out of Iran pretty quickly”.
“The problem is that we didn’t learn anything new. We’re back in a place where we know less, not more, about how we find an off ramp to this war,” said Art Hogan, chief market strategist at B Riley Wealth.
Oil prices surged about 7.0 per cent, taking Brent crude futures to $US108 per barrel.
Energy stocks in the US climbed, with Exxon Mobil and Chevron up more than 2.0 per cent each.
The S&P 500 energy index added 2.4 per cent.
The spike pressured airlines.
United Airlines, Delta Airlines and American Airlines lost between 4.0 per cent and 6.0 per cent.
Separately, private credit jitters resurfaced after Blue Owl capped the amount investors can withdraw from two of its retail-focused funds, sending its shares down 8.0 per cent.
Other asset managers also fell with Apollo Global, Blackstone and Ares Management down between 3.5 per cent and 4.3 per cent.
Financial shares shed 1.1 per cent.
Technology stocks slid 1.8 per cent, with Micron, Lam Research and Sandisk down more than 3.0 per cent each.
In early trading on Thursday, the Dow Jones Industrial Average fell 565.37 points, or 1.21 per cent, to 46,000.37, the S&P 500 lost 79.70 points, or 1.21 per cent, to 6,495.60 and the Nasdaq Composite lost 367.70 points, or 1.68 per cent, to 21,473.24.
The Russell 2000 index fell 1.3 per cent.
Wall Street’s fear gauge, the CBOE VIX index rose to 26.79 points after falling to an over one-week low on Wednesday.
Earlier this week, market expectations that an end to the war was near lifted sentiment.
Wall Street’s three indexes were on track for their biggest weekly rise in four months, and the first week of gains in six.
The S&P 500 and the Nasdaq logged their biggest monthly losses in a year in March, and Brent crude prices marked their strongest monthly performance on record.
Money market participants are no longer pricing in any easing from the Federal Reserve, per CME Group’s FedWatch Tool, as energy-driven inflationary concerns have clouded the central bank’s monetary policy outlook.
They were anticipating two cuts before the conflict.
Friday’s non-farm payroll numbers will be in the spotlight after weekly jobless claims fell last week but US markets will remain closed for the Good Friday holiday.
Investors will also focus on developments around Elon Musk’s SpaceX, which confidentially filed for a US initial public offering on Wednesday, and is expected to target a $US1.75 trillion ($A2.54 trillion) valuation.
Globalstar’s shares jumped 10 per cent after a report said Amazon is in talks to buy the low-earth-orbit communication satellites company.
Declining issues outnumbered advancers by a 3.84-to-1 ratio on the NYSE and by a 4.47-to-1 ratio on the Nasdaq.
The S&P 500 posted 3 new 52-week highs and 12 new lows while the Nasdaq Composite recorded 13 new highs and 91 new lows.
