US stocks opened lower on Wednesday as intensifying tensions between the United States and Iran sent Brent crude above 100 US dollars a barrel and unsettled investors.
The Dow Jones Industrial Average fell 407 points, or 0.8%, shortly after the opening bell, while the S&P 500 slipped 0.3% and the Nasdaq Composite dropped 0.4%.
Oil prices moved sharply higher after Iran said it had fired ballistic missiles at a US base in Jordan, while reports of attacks on vessels heightened concerns over supplies from the region.
Brent crude, the international benchmark, rose 2.8% to 100.62 US dollars a barrel, marking the first time it had traded above the psychologically important level since July.
Energy companies were among the few gainers on Wall Street. Exxon Mobil rose 2.5% and Chevron advanced 2.3%, while the energy sector was the only part of the S&P 500 trading higher, gaining 1.7%.
Most other sectors moved lower as investors assessed the potential economic impact of the conflict, with retailers among the weakest performers. Amazon fell 1.9% and Starbucks lost 1.5%.
“The big story of the day is oil prices, and they are taking the wind out of stocks,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “We’ve seen pockets of strength in the markets, but sentiment varies on a day-to-day basis.”
Investors were also watching the US Treasury’s planned buyback announcement, which could affect bond yields and influence share prices. Attention will then turn to inflation figures due later in the week, including consumer price data on Friday, for clues about the Federal Reserve’s next interest-rate decision.
