After moving sharply lower at the start of trading on Monday, stocks have staged a significant recovery attempt over the course of the session. The major averages have climbed well off their lows of the session but remain in negative territory.
Currently, the major averages are posting modest losses. The Dow is down 182.93 points or 0.4 percent at 48,794.99, the S&P 500 is down 24.08 points or 0.4 percent at 6,854.80 and the Nasdaq is down 49.23 points or 0.2 percent at 22,618.99.
The initial sell-off on Wall Street came after the U.S. and Israel launched joint strikes against Iran over the weekend, killing Iranian Supreme Leader Ayatollah Ali Khamenei.
Iran retaliated by launching waves of drones and missiles on countries across the Middle East, including Kuwait, the United Arab Emirates, Bahrain, Saudi Arabia, Oman, and Qatar.
The conflict in the region escalated further today after Israel launched airstrikes on Hezbollah targets in Beirut and other parts of Lebanon following projectile fire from Lebanese territory into northern Israel.
President Donald Trump suggested the conflict with Iran could go on for the next four weeks, raising concerns about a significant widening of hostilities in the region.
The attacks have led to a spike in the price of crude oil, potentially adding to recent concerns about the outlook for inflation.
“Scenes in the Middle East have caused widespread nervousness across financial markets,” said Dan Coatsworth, head of markets at AJ Bell. “The U.S. attacks on Iran have caused oil prices to soar amid fears of disruptions to supplies, pushing up costs for businesses and consumers.”
He added, “If the issues persist then the market will start to worry about new inflationary pressures and that could lower expectations for near-term interest rate cuts.”
Selling pressure waned shortly after the start of trading, however, leading some traders to pick up stocks at reduced levels.
In U.S. economic news, the Institute for Supply Management released a report showing a slight slowdown in the pace of growth in U.S. manufacturing activity in the month of February.
The ISM said its manufacturing PMI edged down to 52.4 in February after surging to 52.6 in January, but a reading above 50 still indicates growth. Economists had expected the index to dip to 51.8.
Sector News
Despite the recovery attempt by the broader markets, airline stocks continue to see substantial weakness amid concerns about travel disruptions due to the conflict in the Middle East.
The NYSE Arca Airline Index has regained after hitting its lowest intraday level in well over two months but remained down by 3.3 percent.
Significant weakness also visible among housing stocks, as reflected by the 2.5 percent slump by the Philadelphia Housing Sector Index.
Gold and biotechnology stocks are also seeing considerable weakness, while oil producer, software and natural gas stocks have shown strong moves to the upside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index slid by 1.4 percent, while Hong Kong’s Hang Seng Index plunged by 2.1 percent.
The major European markets have also shown significant moves to the downside on the day. While the German DAX Index is down by 2.4 percent, the French CAC 40 Index is down by 2.3 percent and the U.K.’s FTSE 100 Index is down by 1.3 percent.
In the bond market, treasuries have pulled back sharply after moving notably higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 8.2 basis points at 4.044 percent.
U.S. Stocks Regain Ground After Initial Sell-Off But Remain Modestly Lower
2026-03-02 16:06:01
