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ToggleStocks fall as geopolitics heats up
U.S. stocks fell sharply on Tuesday as rising tensions in the Middle East cast a shadow over a previously strong quarter. The Dow Jones Industrial Average fell 302 points (about 0.7%), the S&P 500 fell 1%, and the technology-heavy Nasdaq Composite fell 1.4%.
Is Iran preparing to launch missiles? Situation in Middle East drives oil prices soaring
The stock market decline was triggered in part by a surge in the price of West Texas Intermediate (WTI) crude oil. Oil prices rose as a senior White House official revealed there were "signs" that Iran was preparing to launch a missile aimed directly at Israel. The news sparked panic in the market, causing Wall Street's so-called "fear gauge" - the Chicago Board Options Exchange Volatility Index (VIX) - to rise above 20, reflecting growing unease among traders.
The decline in the market affects most stocks
About 80% of stocks in the S&P 500 fell on Tuesday, pointing to widespread distress in the market. However, energy stocks pulled away from this downtrend, buoyed by news from the Middle East. The S&P 500 energy sector rose more than 1%, contrasting with the struggles in other areas of the market.
Technology stocks suffered the heaviest losses
The technology sector was particularly hard hit, causing the Nasdaq to fall more than the Dow and S&P 500. Shares of major tech giants such as Apple and Tesla each fell more than 2%, while Nvidia fell more than 1%. Notably, Meta (the parent company of Facebook) has bucked the trend and is trading near its all-time highs, showing resilience amid a broader selloff in the tech sector.
The U.S. is to release its non-farm payrolls report
Investors are currently focusing on upcoming economic indicators, especially the September non-farm payrolls report due out on Friday. The report could become an important factor affecting market trends, affecting major stock market averages.
The market movement highlights how geopolitical developments, particularly those affecting key industries such as energy, can have a broad impact on investor sentiment and stock market performance.
Bitcoin drops to 62K with stocks
Bitcoin also fell simultaneously after the news broke, falling from the 63K level to 62K.
