Wall Street Sinks as Oil Prices Surge on Middle East Uncertainty
Wall Street's main indexes dropped on Thursday as uncertainty over prospects for a resolution to the Middle East conflict lifted oil prices and Treasury yields, keeping risk appetite in check ahead of a US-China summit.
The US and Iran leaders exchanged barbs at the UN General Assembly this week, sending oil prices back above $100 a barrel. A potential ban on US diesel exports added to investor caution.
Technology stocks led declines on the day, with chipmakers such as Intel, Micron Technology, and AMD slipping over 1% each. Tesla lost 5.5% after a report said the company sent a 'force majeure' notice to a New Mexico data center. Shares of Switchback Energy Acquisition Corp., the project's developer, also fell 5%.
A rise in Treasury yields, with the yield on the 10-year note reaching its highest since 2004, pressured riskier assets as the market priced in the likelihood of a long war and higher borrowing costs. Steve Sosnick, chief market analyst at Interactive Brokers, said 'People were maybe less willing to chase stocks, but they didn’t seem particularly eager to sell them.'