Stocks Slide as Oil Surges on Iran-UAE Tensions
The S&P 500 sank 0.4%, coming off its latest all-time high. The Dow Jones Industrial Average dropped 557 points, or 1.1%, and the Nasdaq composite slipped 0.2%.
Brent crude oil prices surged 5.8% to settle at $114.44 per barrel after the UAE reported its first attack by Iran since the early April ceasefire. The strikes followed President Trump's push to reopen the Strait of Hormuz, which Iran has closed, trapping tankers in the Persian Gulf and driving prices up from $70 pre-war levels.
Trump announced Sunday that U.S. forces would guide ships through the strait, but prices climbed amid uncertainty. The U.S. military confirmed two American-flagged ships transited successfully Monday, sinking six small boats to secure the area. Despite war concerns, U.S. stocks hit records, buoyed by profit growth and hopes to avoid economic disaster.
Tyson Foods joined the list Monday of those topping analysts? expectations for both profit and revenue during the latest quarter. Norwegian Cruise Line Holdings likewise delivered a better profit for the latest quarter than analysts expected. The cruise operator said some ?execution missteps? also have bookings below where it would like, and its stock fell 8.6%.
UPS and FedEx dropped even more for some of the market?s sharpest losses after Amazon announced a move that could cut into their businesses. The online giant said it?s begun allowing Procter & Gamble, 3M and other big companies to use its logistics services to move inventory, fulfill orders and deliver packages directly to shoppers. UPS dropped 10.5%, and FedEx fell 9.1%, while Amazon rose 1.4%.
GameStop slumped after it said it wants to buy eBay, a much larger company, for $125 per share in cash and stock. Coming into the day, eBay had a total market value that was nearly quadruple GameStop?s. GameStop said it has already built a 5% stake in eBay and sees opportunities to cut $2 billion in annual costs quickly. GameStop, whose stock briefly soared to market-shaking heights during the meme stock craze of 2021, fell 10.1%, while eBay rose 5.1%.
In stock markets abroad, gains for tech stocks helped indexes jump 5.1% in South Korea and 1.2% in Hong Kong, while markets were closed in mainland China and Japan for holidays. European indexes fared worse, and France?s CAC 40 fell 1.7%.
In the bond market, Treasury yield jumped with the price of oil. The yield on the 10-year Treasury rose to 4.43% from 4.39% late Friday. It was at just 3.97% before the war began, and the rise has made mortgages and other kinds of loans for U.S. households and businesses more expensive.
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