NEW YORK, March 3 — US stocks ended close to flat yesterday after a volatile session that saw shares drop early following weekend US and Israeli air strikes on Iran, but there were bounces throughout the day as investors bought on dips.
Coordinated US and Israeli strikes on Iran over the weekend killed Tehran’s Supreme Leader, and sent shockwaves through global markets. Oil prices jumped and most overseas stock indexes closed lower.
But bargain-hunting US investors bought on dips after the early selloff, showing an expectation that the disruptions from the conflict will be limited.
“Market participants think this is all just temporary and that the problems in the oil patch will disappear,” said Bill Smead, founder and chairman of Smead Capital Management.
According to preliminary data, the S&P 500 gained 0.54 points, or 0.01 per cent, to end at 6,879.42 points, while the Nasdaq Composite gained 72.40 points, or 0.32 per cent, to 22,740.61. The Dow Jones Industrial Average fell 86.89 points, or 0.18 per cent, to 48,891.03.
The clash initially boosted defence shares and energy prices and pressured travel and interest‑sensitive sectors. Later, investors ran to tech and weighed how long the Middle East conflict could run and what the conflict means for inflation and Federal Reserve policy.
Smead said investors were reverting to familiar, high-performing stocks like Nvidia, the Magnificent Seven technology stocks and defence sectors.
“When people get scared, they go back to what is comfortable,” he said.
In Europe and Asia, stock markets sank under the weight of surging oil prices and war‑driven uncertainty.
The French and German stock markets fell more than 1 per cent. Japan’s Nikkei 225 slid 1.73 per cent, having plunged as much as 2 per cent at the open.
Energy companies, whose profits rise alongside oil prices, outperformed, while travel and airline stocks sank due to flight cancelations, higher jet‑fuel costs and widespread Middle East airspace closures.
Several oil and gas facilities in the Middle East stopped production. US crude prices settled up 6 per cent at US$71.23 a barrel after being up twice as much during the session.
Defence stocks also got a boost, with the main US defence equity benchmark, the Dow Jones US Defence Index, trading up.
President Donald Trump also told CNN the “big wave” is yet to come, although some Middle Eastern countries were lobbying US allies to persuade a swift end to the war.
AES Corp fell after a consortium led by BlackRock-owned Global Infrastructure Partners and equity firm EQT AB agreed to acquire the utilities company for US$33.4 billion at a discount to its last close. — Reuters
