Investing.com — The S&P 500 fell Tuesday as investors fled risky assets amid growing fears of a broader conflict in the Middle East after Iran launched several missiles at Isreal.
At 4:00 PM ET (2000 GMT), the stock fell 173 points, or 0.4%, and traded 1% lower while down 1.5%.
All three major Wall Street averages advanced in both September and the third quarter, the first positive September for the S&P 500 since 2019.
The S&P 500 is now up more than 20% this year – the first time since 1997 that the benchmark index has risen 20% or more in the first nine months of the year.
Iran launches an attack on Israel
Iran launched ballistic missiles towards Israel, the Israeli military said on Tuesday, escalating a conflict in the oil-rich Middle East that threatens to suck in major regional powers as well as the US.
Iran warned international parties about the scale and timing of the attack, Sky News Arabia reported. Israel said it would carry out strong airstrikes, signaling that a potential retaliatory strike on Tehran could be imminent.
This follows Israeli forces beginning ‘limited’ attacks on Hezbollah targets in Lebanon’s border area.
Growing fears of a wider conflict in the Middle East pushed oil prices higher on fears of supply disruptions in the region, while defense was also sharply higher.
Lockheed Martin Company (NYSE:), Northrop Grumman Corporation (NYSE:) and L3Harris Technologies Inc (NYSE:) higher.
Powell curbs major cutback expectations
The new month had already started with Wall Street in the background after the Fed chief curbed expectations of another big rate cut this month, saying the committee doesn’t feel “in a rush to cut rates any time soon.” ” and that the process of lowering the Fed Funds rate will “work out over time.”
Goldman Sachs strategists said they see Powell’s comments “consistent with our forecast for a 25 bp cut in November and December.”
“We continue to view the choice between 25 bp and 50 bp in November as a close call,” she added.
The Fed began its policy shift last month with a 50 basis point rate cut, the first cut since 2020.
Heavy economic data
There’s more U.S. economic data to study as investors look for more clues about how the Fed is tackling more potential rate cuts this year.
The closely watched vacancies and labor turnover survey is expected to show that there were 7.640 million vacancies available in August.
Investors will also keep an eye on the September valuation of the Institute for Supply Management and purchasing managers’ indices this week for further signals on the momentum of the US economy.
The week ends with the release of the October report on Friday, with economists expecting the US economy to have added 144,000 jobs.
CVS Health considers options; Boeing is reportedly planning a share sale
On the corporate front, shares of CVS Health (NYSE:) fell 2% after Reuters reported that the company is reportedly considering options including splitting its retail and insurance divisions.
The news agency, citing people familiar with the matter, said CVS Health has discussed various options with its financial advisers in recent weeks, including the process of a split.
Boeing Co (NYSE:) cuts losses by 1%, despite Bloomberg reporting that the aircraft maker is considering selling at least $10 billion worth of shares to strengthen its balance sheet.
(Peter Nurse contributed to this story)
