U.S. stock markets fell this Wednesday (8) after oil’s rise increased investors’ concerns about inflation and the economic impacts of a new escalation of tensions between the United States and Iran.
The move came after the current U.S. president, Donald Trump, said the ceasefire between the countries had ended, reducing expectations for the continuation of diplomatic negotiations.
Among Wall Street’s main indexes, the Dow Jones Industrial Average closed the day at 52.287,44 points, down 637,71 points, or 1,20%. The S&P 500 fell 45,85 points, retreating 0,61%, to 7.458,00 points.
The Nasdaq Composite, an index with a strong participation of technology companies, also posted losses. The indicator ended the session at 25.680,09 points, a decline of 138,60 points, equivalent to 0,54%.
Other assets followed the risk-off move. The Russell 2000 index fell 0,89%, to 2.955,97 points, while the VIX, known as Wall Street’s “fear index,” rose 8,11%, reaching 17,44 points.
Pressure on the markets came mainly from the energy sector. Crude oil with a maturity date of August 26 rose 6,35%, up US$ 4,47, reaching US$ 74,91 per barrel.
Oil’s gains occurred after Trump said the agreement reached between the U.S. and Iran had been ended. During a statement in Ankara, before a NATO summit, the U.S. president said: “As far as I’m concerned, it’s a waste of time dealing with them,” while commenting on negotiations with the Iranian government.
The increase in tensions also influenced the cryptocurrency market. Bitcoin fell 2,44%, trading near US$ 61.950,68, following the negative move seen in other assets considered more sensitive to risk.
Besides oil, investors are watching the next steps of the Federal Reserve regarding interest rates in the United States. The expectation is that the minutes of the Fed’s last meeting will provide new signals about the direction of U.S. monetary policy.
In the bond market, U.S. Treasury yields advanced. The 10-year note reached 4,56%, while the 30-year maturity reached 5,07%, levels that increase pressure on stocks and other financial assets.
Gold, on the other hand, fell 1,98%, trading at US$ 4.075,20 per ounce, after a session marked by investors seeking protection against geopolitical uncertainties.