Stocks dig out of Israel strike-fueled tumble
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Stocks opened mostly lower but were digging themselves out of a deeper sell-off on Friday, after Israel’s retaliatory strike on Iran spooked the market overnight and spurred a rush to safe havens such as gold.
The Dow Jones Industrial Average (^DJI) rose 0.2%. The S&P 500 (^GSPC) fell about 0.1%, while the tech-heavy Nasdaq Composite (^IXIC) slid 0.3% after sharper falls.
The market initially reacted with alarm to overnight reports Israel had attacked an Iranian city home to nuclear facilities, despite urging from allies to restrain from a tit-for-tat cycle of military violence. With few details about the strike then available, prices for oil and gold jumped as stocks and Treasury yields sank, while the CBOE Volatility index — Wall Street’s “fear gauge” — hit a more than five-month high.
Those moves have weakened as some composure returned amid signs the scope of the Israeli strike was limited. But investors are still on high alert, though Iran has confirmed the drone attack and said it failed.
Stocks were already under pressure before the shock amid persistent uncertainty about Federal Reserve interest-rate cuts.
The S&P 500 on Thursday notched five losing days in a row as investors absorbed disappointing earnings from Netflix (NFLX). That weighed on hopes that quarterly earnings will meet high expectations to help revive the equity rally. Shares of the streaming giant, the first of the megacap techs to report, slid more than 7% to start the morning session.
Friday brought results from Procter & Gamble (PG), which raised its full-year profit forecast despite missing quarterly sales estimates. Also on the docket, American Express (AXP) posted a profit beat as wealthy customers kept spending.
Meanwhile, US government bonds pulled back almost fully from their biggest rally of the year. The yield on the safe-haven 10-year Treasury (^TNX) fell to trade around 4.6%, after a fall of 14 basis points.
In commodities, Brent crude futures (BZ=F) — the global oil benchmark — erased an earlier 4% spike above $90 a barrel to trade around 0.4% lower around $86.70. West Texas Intermediate crude futures (CL=F) were down similarly around $82 a barrel. Gold (GC=F) was unwinding earlier gains to trade lower.
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