US Stocks Plummet Amid Concerns Over Middle East Tensions

U.S. stocks experienced a significant decline on Tuesday due to concerns over escalating tensions in the Middle East, which led to a reversal of some gains made in the previous month, just as important economic data is set to be released.

By 09:50 ET, the Dow Jones Industrial Average was down by 250 points, or 0.6%. The S&P 500 decreased by 40 points, or 0.7%, while the NASDAQ Composite dropped 170 points, or 1%. All three major indices had shown positive trends in September and for the third quarter, marking the S&P 500’s first positive September since 2019. The S&P 500 has risen over 20% this year, a milestone not achieved since 1997 within the first nine months.

#### Concerns Over Regional Conflict

Reports emerged that Iran is preparing a ballistic missile strike against Israel, escalating fears of a broader conflict in the oil-rich Middle East. This news comes in the wake of Israeli troops conducting “limited” operations against Hezbollah targets along the Lebanese border.

At the same time, oil prices were affected, with Brent crude rising 2.8% to $73.71 per barrel, while U.S. crude futures (WTI) increased by 2.6% to $69.94 per barrel. Additionally, the American Petroleum Institute is expected to release its weekly estimate of U.S. crude oil and fuel inventories for the week ending September 27.

#### Fed Chair Signals Caution

In the early days of the new month, Wall Street faced challenges following comments from Federal Reserve Chair Jerome Powell, who tempered expectations for another significant rate cut this month. Powell noted that the committee is not in a rush to lower rates quickly and that adjustments will take time. Goldman Sachs strategists interpreted Powell’s comments as aligning with their predictions of 25 basis point cuts in November and December.

#### Upcoming Economic Data

Investors are on the lookout for further economic indicators that could influence the Fed’s approach to potential rate cuts this year. The Job Openings and Labor Turnover Survey (JOLTS) report is anticipated to reveal approximately 7.64 million available job roles for August.

Additionally, the September readings for the manufacturing and services purchasing managers’ indices from the Institute for Supply Management will be closely examined for insights into the U.S. economy’s momentum. The week will conclude with the October nonfarm payrolls report, wherein economists expect the U.S. economy to have added 144,000 jobs.

#### CVS Health Evaluates Strategic Options

In corporate news, CVS Health’s stock fell by 1.7% following reports that the company is considering a separation of its retail and insurance divisions. According to sources, CVS has been in discussions with financial advisors about various options, including a potential split, in recent weeks.