US stocks reverse sharply as Middle East tensions erase early rally
U.S. stocks finished lower after a strong start to the session unraveled as geopolitical tensions in the Middle East intensified throughout the trading day. All three major indices opened firmly in positive territory and extended those gains during the morning, but persistent selling pressure emerged into the afternoon, steadily chipping away at the advance before pushing each index into negative territory by the close. At their intraday highs, the Dow Jones Industrial Average was up 268 points, the S&P 500 had gained 55.53 points, and the Nasdaq Composite was ahead by 295.56 points. The small cap Russell 2000 was up 15.87 points before it reversed lower and was the weakest of the major indices (-0.67%)/ All the gains were completely erased as investors shifted toward a more defensive posture.
Major indices at the close:
- Dow Jones: 51,846.19 (-305.03 points, -0.58%)
- S&P 500: 7,443.44 (-14.26 points, -0.19%)
- Nasdaq Composite: 25,508.07 (-12.17 points, -0.05%)
- Russell 2000: 2,942.44 (-19.78 points, -0.67%)
Despite the broader market weakness, several AI and semiconductor-related names managed to finish in positive territory. Credo Technology Group (CRDO) led the group with a gain of 4.63%, while LitePoint (LITE) climbed 4.47%. Other notable winners included Marvell Technology (MRVL) (+3.32%), Coherent (COHR) (+2.81%), Nebius Group (NBIS) (+2.76%), SoundHound AI (SNDK) (+2.67%), and Intel (INTC) (+2.13%).
The Dow, however, was weighed down by several large-cap industrial and defensive names. Merck & Co. led the declines, followed by:
- Merck & Co. (MRK): -2.42%
- Sherwin-Williams (SHW): -2.33%
- Boeing (BA): -2.13%
- Apple (AAPL): -2.11%
- Caterpillar (CAT): -1.82%
- Walmart (WMT): -1.79%
- Home Depot (HD): -1.72%
- Johnson & Johnson (JNJ): -1.67%
The day’s price action serves as another reminder that while underlying enthusiasm for AI and technology remains intact, geopolitical developments continue to be a powerful driver of investor sentiment, capable of quickly overwhelming an otherwise constructive technical backdrop.
This article was written by Greg Michalowski at investinglive.com.