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Dow drops 850 points as Fed decision and AI earnings loom
The S&P 500 fell 0.8% and the Nasdaq slid 1.0%, after Iran attacked the US and Brent crude jumped more than 7% to above $90 per barrel.
US stocks fell on Wednesday as investors weighed fresh geopolitical risk, a Federal Reserve policy decision later in the day, and upcoming AI related earnings. The S&P 500 dropped 0.8%, the Nasdaq Composite declined 1.0%, and the Dow Jones Industrial Average fell 1.6%, or about 850 points, as oil prices rose on renewed Middle East tensions, according to Yahoo Finance.
Iran launched an attempted surprise attack on Tuesday, according to US Central Command, restarting fighting between the US and Iran after a pause in hostilities that began Friday. Oil prices jumped, with Brent crude rising more than 7% to trade back above $90 per barrel, feeding into the market selloff.
The move also reflected investor caution ahead of major earnings catalysts tied to AI spending. Yahoo Finance noted concerns after SK Hynix reported a 557% year over year profit increase in the second quarter that still came in below Wall Street expectations, and it said markets will also react to quarterly results from Microsoft and Meta later in the day.
Traders are positioning for the Fed decision at 2:00 p.m. ET, where the central bank is expected by many to hold rates steady, while inflation concerns and limits on Fed communications have left room for a hike. Investors are also set to watch additional Big Tech updates, including results from Alphabet after its capital expenditure guidance spooked markets last week, along with consumer earnings from Starbucks and Chipotle and AI exposed updates from Qualcomm, Yahoo Finance reported.
Latest closeWTI crude $81.23 ▼1.7%|Brent $85.92 ▼2.8%|S&P 500 7,428.78 ▲0.2%