Stock Market Today: S&P 500 Closes Lower Amid Rising Middle East Tensions

The S&P 500 declined on Tuesday as investors moved away from riskier assets due to escalating concerns over a potential wider conflict in the Middle East, following Iran’s missile strikes on Israel.

As of 4:00 p.m. ET, the Dow Jones Industrial Average was down 173 points, or 0.4%, while the S&P 500 had fallen 1%. The NASDAQ Composite dropped 1.5%. Despite this decline, all three major indices had shown gains in September and throughout the third quarter, marking the first positive September for the S&P 500 since 2019. This year, the S&P 500 is now up over 20%, which is the first instance of such an increase through the first nine months of the year since 1997.

### Iran Launches Strike on Israel

The Israeli military reported that Iran launched ballistic missiles toward Israel, exacerbating the conflict in the oil-rich region and potentially involving major regional players and the United States. Iran had informed international parties of the scale and timing of the attack, while Israel announced its intent to conduct powerful airstrikes, indicating a possible retaliatory action against Tehran.

This development comes as Israeli troops initiated “limited” raids against Hezbollah targets along the Lebanon border. The fears of an expanding conflict in the Middle East have led to an increase in oil prices due to concerns over possible supply disruptions, while defense stocks experienced notable gains.

### Powell Reins in Major Rate Cut Expectations

The new month began with Wall Street suffering as Federal Reserve Chairman Jerome Powell tempered expectations for an immediate significant rate cut. He indicated that the committee is not in a rush to lower rates and that any reduction in the fed funds rate will occur gradually. Goldman Sachs strategists interpreted Powell’s comments as aligning with their forecast for a 25 basis point cut in November and December, highlighting that the choice between a 25 or 50 basis point cut in November is a close call. The Fed recently enacted a policy shift last month with a 50 basis point cut, marking the first reduction since 2020.

### Heavy Economic Data Slate Ahead

Investors are awaiting more U.S. economic data to glean insights into the Fed’s approach toward potential rate cuts this year. The widely watched Job Openings and Labor Turnover Survey (JOLTS) is anticipated to show 7.640 million available roles for August. Additionally, market participants will be analyzing the September readings of the Institute for Supply Management’s manufacturing and services purchasing managers’ indices for further indications of the U.S. economic momentum. The week will conclude with the release of the October nonfarm payrolls report on Friday, with expectations suggesting that the U.S. economy added 144,000 jobs.

### Corporate Insights: CVS Health and Boeing

In corporate news, CVS Health saw its stock fall by 2% following reports of the company’s consideration of options that may include separating its retail and insurance divisions. Reports indicate that CVS Health has been exploring various strategies with its financial advisors in recent weeks.

Meanwhile, Boeing managed to recover from earlier losses, rising by 1% despite reports that the company is contemplating a stock sale worth at least $10 billion to strengthen its balance sheet.