Stocks opened lower Wednesday, as a tightening in Middle East tensions was reflected in a jump in oil prices and investors digested lackluster earnings from Morgan Stanley.
The Dow Jones Industrial Average (^DJI) fell more than 0.2% while the benchmark S&P 500 (^GSPC) dropped nearly 0.5% and the tech-heavy Nasdaq Composite (^IXIC) slipped 0.3%.
Caution prevailed in markets as Israeli and Palestinian authorities traded blame for an explosion at a hospital in Gaza.
President Joe Biden landed in Israel on Wednesday, but Jordan canceled a planned summit with Arab leaders after the Gaza blast. Biden’s comment that the “other team” was responsible dimmed hopes for a diplomatic solution and highlighted the risk of a full-blown regional conflict.
Oil prices moved up more than 1%, with gains stacking up after Iran’s foreign minister called for an embargo against Israel. Crude oil (CL=F) futures climbed to $88 a barrel, while Brent crude (BZ=F) traded at $91 a barrel at the last check.
Rising fuel prices give investors another inflation factor to consider as they weigh the Federal Reserve’s next move in interest rates. The major US stock indexes closed mostly flat on Tuesday after strong retail sales spurred expectations that the Fed will hike again this year.
Read more: What a Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
After the bell, Tesla (TSLA) and Netflix (NFLX) lead out tech earnings, which will be closely watched for any impact from “higher for longer” interest rates.
Among techs, shares of ASML (ASML, ASML.AS) fell after the Dutch chip equipment maker warned about flat sales ahead, as customers slow orders thanks to an uncertain economic backdrop.
Meanwhile, Nvidia (NVDA) stock retreated alongside other semiconductor makers after the US tightened curbs on AI chip technology exports to China, though there could be a lifeline in the rules.
JStocks open in the red
Stocks were lower at the market open on Wednesday as rising Middle East tensions sent oil prices higher and investors digested lackluster earnings from Morgan Stanley.
The Dow Jones Industrial Average (^DJI) fell more than 0.2% while the benchmark S&P 500 (^GSPC) dropped nearly 0.5% and the tech-heavy Nasdaq Composite (^IXIC) slipped 0.3%.
Morgan Stanley, P&G, and ASML: Stocks trending in premarket trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page in premarket trading on Wednesday:
Morgan Stanley (MS): Shares fell by over 2% on Wednesday. Third quarter profits dropped 9% from a year ago as revenue from investment banking and trading fell, as reported by Yahoo Finance’s David Hollerith.
Procter & Gamble (PG): Shares rose by 2% premarket. Yahoo Finance’s Brian Sozzi reported on P&G’s successful push with price increases as it continued to double down on new product innovations.
ASML (ASML): Shares in ASML were down by 3%. The semiconductor equipment maker announced lower-than-expected orders on Wednesday.
Nvidia (NVDA): Shares dropped by over 1% after a more than 4% decline on Tuesday, after the US said it would tighten curbs on chip exports to China. However, the Biden administration’s new rules appeared to throw Nvidia, along with Intel (INTC) and AMD (AMD), a lifeline in the hope it would help preserve the US chipmaking business. It was also reported on Wednesday that Foxconn will build a new kind of data center using Nvidia chips and software.
KStock futures fall as Middle East crisis unsettles markets
Major US stock gauges were poised for a muted open Wednesday amid growing tensions in the Middle East, as investors waited for Netflix and Tesla to kick off tech earnings.
Futures on the Dow Jones Industrial Average (^DJI) were down 0.34%, or 117 points, while S&P 500 (^GSPC) futures dropped 0.49%. Contracts on the tech-heavy Nasdaq 100 (^NDX) fell 0.64%.
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