Stocks tumble, oil spikes as Mideast tensions flare
- Iran's missile attack on Israel sent US stocks lower on Tuesday.
- Gold and crude oil rallied, while the 10-year Treasury yield dropped.
Stock indexes dropped on Tuesday as escalating Middle East tensions jolted investors.
Traders elected to crowd into safe-haven assets like gold as Iran launched a barrage of missiles toward Israel on Tuesday. The attack was in response to Israel's ground offensive into Lebanon, which began the night before.
Crude oil jumped as much as 6% on the news. Traders will now be bracing for Israel's response to Iran, and whether this has the potential to disrupt oil flows, said Helima Croft, RBC Capital Markets head of global commodity strategy.
"Iran is producing at a five-year high," she told CNBC. "We do need to think of a scenario where Iranian oil supply is at risk."
As oil rallied, so did gold and the bond market, with investors piling into risk-off assets. On Tuesday, the yellow metal jumped more than 1%, and continues to hover near its recent all-time record.
"Military conflicts can quickly escalate into a scenario that causes markets to sell off dramatically, with safe haven assets such as gold and Treasuries seeing heavy inflows," said Quincy Krosby, Chief Global Strategist for LPL Financial.
Here's where US indexes stood at the 4 pm closing bell on Tuesday:
- S&P 500: 5,708.75, down 0.9%
- Dow Jones industrial average: 42,156.97, down 0.4% (173 points)
- Nasdaq composite: 17,910.36, down 1.5%
On the economic data front, job openings in August increased more than expected unexpectedly to 8.04 million, surpassing consensus estimates of 7.6 million, according to the latest Job Openings and Labor Turnover Survey.
"This noisy indicator is starting to suggest a stabilization of the job market as the Fed pivots," Bill Adams, Chief Economist for Comerica Bank, wrote. "Relatively few workers are being fired or laid off, and few are leaving jobs voluntarily for other opportunities, either."
Investors can expect more labor data to come in this week, culminating in September's jobs report on Friday. Economists forecast 150,000 jobs added for the month and a flat unemployment rate of 4.2%.
Here's what else happened today:
- There are still 2 steps China needs to take to avoid long-term deflation, Yale economist Stephen Roach says.
- A Russian firm is reportedly forced to barter for Pakistani rice as Western sanctions bite down.
- Don't put money into Chinese stocks over the long-term, 'Big Short' investor Kyle Bass says.
- Here are the biggest stock winners and losers coming out of the port strike.
In commodities, bonds and crypto: