U.S. Stocks Close Wednesday in Red
The Dow Jones Industrial Average dropped 620.72 points, or 1.21 percent, to settle at 50,687.07. The S&P 500 declined 56.10 points, or 0.74 percent, closing at 7,553.68, while the Nasdaq Composite Index shed 239.93 points, or 0.89 percent, to finish at 26,853.98.
Six of the 11 primary S&P 500 sectors ended the session lower, with technology and financials absorbing the steepest losses — falling 1.52 percent and 1.21 percent, respectively. Energy and consumer staples bucked the trend, gaining 1.38 percent and 0.77 percent to lead the day's advancers.
Geopolitical tensions remained front and center for Wall Street, as diplomatic efforts between Washington and Tehran showed little sign of breakthrough. Earlier this week, President Donald Trump took to social media to assert that talks were progressing "at a rapid pace." Yet Israel's intensified military campaign against Hezbollah in Lebanon has emerged as a substantial roadblock to any deal — and to the reopening of the Strait of Hormuz.
Oil markets surged in tandem with the geopolitical anxiety. West Texas Intermediate crude for July delivery climbed 2.26 U.S. dollars, or 2.41 percent, settling at 96.02 dollars per barrel on the New York Mercantile Exchange. Brent crude for August delivery advanced 1.81 dollars, or 1.89 percent, to close at 97.81 dollars per barrel on the London ICE Futures Exchange.
The oil price spike reverberated through bond markets, pushing U.S. Treasury yields upward — the 10-year yield edged toward 4.5 percent while the 30-year approached the 5 percent threshold.
On the labor front, payroll provider ADP offered a rare bright spot, reporting that private employers added 122,000 workers in May — up from 105,000 in April and ahead of the Dow Jones consensus forecast of 110,000. "Hiring was more broad-based in May than we've seen in the last few years," said ADP chief economist Nela Richardson. "The labor market continues to show sustained momentum going into the summer hiring season."
Among individual stocks, IBM, Salesforce, Microsoft, and Nvidia dragged on the broader market, each falling somewhere between roughly 3 percent and 7 percent. Broadcom slipped 0.49 percent ahead of its closely watched earnings report, despite surging nearly 5 percent on Tuesday to register a record closing high.
With the Middle East outlook remaining deeply uncertain and Friday's nonfarm payrolls report on the horizon, investors are expected to remain firmly in defensive mode.
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