[New York Stocks] Oil Prices Surge on Fears of Middle East Escalation; All Three Indexes Fall

Brent Crude Tops $116 as Fears of Wider Middle East War Grow

All three major U.S. stock indexes fell as military tensions between the United States and Iran escalated. Investor sentiment weakened as international oil prices surged on concerns that the war in the Middle East could intensify again.

AFP-Yonhap News

On Oct. 23 (local time), the Dow Jones Industrial Average closed at 52,215.16 on the New York Stock Exchange (NYSE), down 652.82 points, or 1.23%, from the previous session. The S&P 500 fell 39.75 points, or 0.52%, to 7,623.68, while the tech-heavy Nasdaq Composite dropped 53.52 points, or 0.21%, to close at 25,955.34.

The main reason for the market decline was a surge in international oil prices amid rising military tensions in the Middle East. Brent crude futures for December delivery settled at $116.72 a barrel, up 3.1% from the previous session. That was their highest level in about six months, since April 29. U.S. West Texas Intermediate (WTI) crude futures also rose 3.8% to $103.27 a barrel.

According to foreign media reports, concerns about disruptions to crude oil supplies mounted after Yemen's pro-Iran Houthi rebels recently attacked energy infrastructure in Saudi Arabia, among other targets. Reports that the United States and Israel were considering resuming airstrikes on Iran also fueled fears that the war in the Middle East could intensify again. Iran warned that if the United States and Israel resumed airstrikes, it could attack economic facilities and civilian infrastructure in neighboring countries.

The sell-off that had centered on artificial intelligence (AI)-related technology stocks the previous day spread to other sectors, including financials and industrials. American Express, a credit card company, fell 3.7%, while heavy equipment manufacturer Caterpillar dropped 2.4%. Goldman Sachs also fell 1.8%.

American Express said it planned to cut about 5% of its global workforce. The move is intended to improve organizational efficiency in preparation for the AI era.

Meanwhile, selling eased somewhat in AI-related technology stocks, which had plunged the previous day. Semiconductor company Micron Technology rose 2.5%, and AMD gained 1.7%. Microsoft also advanced 0.7%.

Energy companies, which are expected to benefit from rising international oil prices, gained. Chevron rose 2.9%, and ConocoPhillips advanced 3.6%.

U.S. Treasury yields rebounded. The yield on the 10-year U.S. Treasury, considered a benchmark for global bond yields, rose to around 4.99% in a reversal of the sharp drop the previous day.

Gold, a safe-haven asset, fell. Spot gold prices dropped below $4,000 an ounce during the session, hitting their lowest level in about three months.

The decline is attributed to heightened inflation concerns triggered by the surge in international oil prices, which increased the likelihood of further interest rate hikes by the U.S. Federal Reserve (Fed). Some investors who received margin calls after the previous day's sharp drop in technology stocks were also cited as a factor behind the decline, as they sold gold to raise cash.

This content was produced with the assistance of AI translation services.