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Stocks fall, safe haven assets rally with oil as Iran fires on Israel

MSCI's worldwide equities index fell with Treasury yields on Tuesday as investors avoided riskier properties while oil futures rallied on issues about supply after Iran launched missiles at Israel.

However Wall Street stocks ended above their session lows and Treasuries yields also pared decreases on hopes that further escalation of the Middle East conflict was not impending.

Earlier on Tuesday, Iran fired a salvo of ballistic rockets at Israel in retaliation for Israel's campaign against Tehran's. Hezbollah ally in Lebanon. The United States condemned Iran's. move and said it was consulting with Israel on an action after. U.S. military forces helped Israel defeat the attack.

The U.S. dollar index rose and gold, traditionally a safe. haven, increased throughout the session to more than 1% as investors. tried to find less risky locations to put their money. Oil rates. rallied as the intensifying violence raised issues about supply.

On top of geopolitical worries, U.S. investors worried about. the consequences of Typhoon Helene and the halt of about half of. U.S. ocean shipping due to a strike by dockworkers on the East. and Gulf Coasts after a midnight due date passed without any sign of. a new contract deal with port owners.

And including extra pressure to equities, the S&P 500 and the. Dow had ended Monday's session with record closing highs.

Markets were priced for excellence. Then overnight we got a. few additional wrinkles in the mix. The port strike is one. The hit. east coast facilities drew from the consequences of typhoon. Helene is another, said Carol Schleif, Chief Investment Officer. at BMO family office in Minneapolis.

Then you include the 3rd aspect of Iran shooting missiles. at Israel, stated Schleif, noting that the attacks contributed to gains. in the dollar and produced demand for Treasuries. Financiers have. been holding their breath hoping it would not escalate.

Oil prices settled higher though listed below their highs of the. day. Clay Seigle, an independent political threat strategist, said. that an Israeli attack on Iranian oil production or export. facilities might cause a material disturbance, potentially more. than a million barrels each day.

U.S. crude settle up 2.44% at $69.83 per barrel and. Brent settled at $73.56 per barrel, up 2.59% on the day. Previously in the day, both unrefined benchmarks increased more than 5%.

On Wall Street the Dow Jones Industrial Average fell. 173.18 points, or 0.41%, to 42,156.97, the S&P 500 fell. 53.73 points, or 0.93%, to 5,708.75 and the Nasdaq Composite. fell 278.81 points, or 1.53%, to 17,910.36.

MSCI's gauge of stocks across the globe fell. 6.09 points, or 0.71%, to 845.69. Earlier, Europe's STOXX 600. index ended the day down 0.38%.

CBOE's market volatility index, Wall Street's fear gauge,. rose to 19.25 - its greatest closing level since Sept. 9.

In foreign exchange markets, the Japanese yen and Swiss. franc, viewed as safe haven currencies, had both made headway as. earlier reports pre-empted the attacks from Iran. The dollar was. likewise assisted by data showing resistant a U.S. labor market on. Tuesday and a push back from Federal Reserve Chair Jerome Powell. on Monday versus bets on bigger rate of interest cuts.

The dollar index, which measures the greenback. against a basket of currencies consisting of the yen and the euro,. rose 0.45% to 101.20.

The euro was down 0.58% at $1.1069 and versus the. Japanese yen, the dollar weakened 0.08% to 143.51.

As financiers looked to the safety of U.S. Treasuries, the. yield on benchmark U.S. 10-year notes fell 6.3 basis. points to 3.739%, from 3.802% late on Monday.

The 2-year note yield, which typically moves in. step with rate of interest expectations, fell 4.3 basis indicate. 3.6084%, from 3.651% late on Monday.

Referring to the Iran/Israel conflict, Jim Barnes, director. of fixed income at Bryn Mawr Trust in Berwyn, Pennsylvania,. said: We'll just wait and see and ideally this time out will. hold and then the marketplace will alter their attention now back to. a few of the early morning data, which certainly has more and. longer-term ramifications for yields.

Precious metals, also viewed as a safe house possession in. unsure times, were in need on Tuesday. Area gold. increased 0.91% to $2,658.39 an ounce. U.S. gold futures increased. 0.95% to $2,661.10 an ounce.

(source: Reuters)