Wall Street closed lower on Thursday as tensions between the United States and Iran rose, heightening geopolitical concerns. Investors assessed economic data. The Nasdaq Composite, the Dow and the S&P 500 ended in negative territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 1.3%, or 703.84 points, to close at 52,759.21. Twenty-four components of the 30-stock index ended in the negative territory, five ended in the positive territory, and one remained unchanged. The major loser of the Dow was Walmart Inc. WMT. The stock price of this retailer fell 9.2%. Walmart currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The tech-heavy Nasdaq Composite declined 1% to close at 26,067.17.
The S&P 500 lost 0.9% to end at 7,641.16. Out of the 11 broad sectors of the broad-market index, nine ended in negative territory, while two were in positive territory. The Consumer Staples Select Sector SPDR (XLP), the Health Care Select Sector SPDR (XLV) and the Consumer Discretionary Select Sector SPDR (XLY) fell 1.9%, 1.9% and 1.8%, respectively, while the Energy Select Sector SPDR (XLE) rose 0.4%.
The fear gauge, the CBOE Volatility Index (VIX), increased by 7.5% to 16.01. A total of 9.61 billion shares were traded on Thursday, lower than the last 20-session average of 16.64 billion. The S&P 500 posted 16 new 52-week highs and three new lows, and the Nasdaq Composite recorded 67 new highs and 104 new lows.
U.S.-Iran Tensions Add to Market Uncertainty
Geopolitical concerns related to the increasing conflict between the United States and Iran have added to the uncertainty in markets.
According to CNBC, President Donald Trump said on Wednesday that the United States would launch a major economic campaign against Iran. Treasury Secretary Scott Bessent said that Washington plans to impose tougher sanctions on the country.
These tensions could drive up inflation and introduce greater volatility to the financial markets, as well as pose a threat to energy supplies globally, potentially through the disruption of oil through the Strait of Hormuz.
Economic Data
The Department of Labor reported that initial claims decreased by 6,000 to 206,000 for the week ended Aug. 15, marginally above the Zacks Consensus Estimate of 204,000. The previous week’s data was revised upward to 212,000 from 209,000 reported earlier.
Continuing claims (those who have already received government aid and reported a week behind) increased 18,000 to 1.799 million for the week ended Aug. 8. The previous week's level was revised upward by 4,000 to 1.781 million from 1.777 million reported earlier.
The Philadelphia Fed Index for August came in at 47.4, beating the Zacks Consensus Estimate of 25 and July’s metric of 41.4.
Leading Indicators increased 0.2% from the previous month in July, in line with the Zacks Consensus Estimate. The metric decreased 0.1% month over month in June, revised from a 0.2% decline.
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This article originally published on Zacks Investment Research (zacks.com).