US Stocks Close Lower, Oil Rally and Gulf War Weigh Sentiment
US stocks closed sharply lower on Thursday (March 12), as investors navigated the escalating conflict in the Persian Gulf region, which pushed oil prices back near US$100 per barrel.
The S&P 500 and Dow Jones Industrial Average each fell 1.5%, while the Nasdaq Composite Index slumped 1.7%, reflecting renewed concerns that the war, which has yet to show a quick resolution, will prolong energy cost pressures and exacerbate inflation risks.
In energy markets, Brent crude oil closed above US$100 per barrel following harsh rhetoric from Iran's new supreme leader, Mojtaba Khamenei, who stated that the Strait of Hormuz must remain closed to pressure international rivals. The market largely ignored the IEA's planned coordinated release of 400 million barrels from emergency reserves, as market participants assessed that the move did not guarantee a restoration of supply flows in the strategic waterway.
Pressure was also evident in the financial sector. Morgan Stanley shares fell 4.1% after the company restricted withdrawals from its private credit products, adding to the burden on financial stocks amid growing concerns about liquidity risks and financing conditions.
On the monetary policy front, market participants expect the Federal Reserve to hold interest rates at its meeting next week while awaiting clarity on the economic impact of the war, particularly through energy, inflation, and consumer sentiment.
Source: Newsmaker.id
