The Dow Jones Industrial Average dropped more than 400 points at Wednesday's open as U.S.-Iran hostilities flared up before the Federal Reserve's interest-rate decision. West Texas Intermediate crude futures spiked more than 6%, while the S&P 500 and the Nasdaq composite each fell 0.2%. SK Hynix declined more than 2% premarket after missing second-quarter sales estimates.
The Dow industrials fell more than 400 points, or 0.9% just after Wednesday's open, as U.S.-Iran hostilities flared up before the Fed's rate decision and Fed Chair Kevin Warsh's press conference. The S&P 500 was down 0.2%, and the tech-heavy Nasdaq composite also fell 0.2% in morning trading.
West Texas Intermediate crude oil futures spiked more than 6%, trading around $84.40 per barrel, and the 10-year Treasury yield was up at 4.63%. Among exchange traded funds, the Invesco QQQ fell 0.2% while the State Street SPDR S&P 500 was off 0.1% after the opening bell.
Intercepted missiles end the U.S.-Iran ceasefire
The U.S. said it intercepted Iran missiles targeting American bases in the Mideast, which ends several days of a ceasefire between the two nations. Bloomberg Television reported that President Donald Trump told Fox News he vowed to strike back hard against Iran, while Iranian-backed Houthis in Yemen claimed to attack another Saudi oil tanker in the Red Sea.
Inside the Dow, Chevron jumped more than 2% premarket amid the sharp rise in oil prices, and Procter & Gamble sold off 3% after the consumer products giant reported earnings.
SK Hynix misses second-quarter sales estimates
SK Hynix declined more than 2% premarket after the memory chip leader missed sales estimates for the second quarter. Revenue rose 257% year over year to $54.4 billion, short of the $57.6 billion analysts polled by FactSet had expected.
South Korea's stock market lost a further 8.3%, and SK Hynix shares slumped 9%. Tech concerns have meanwhile pushed the Nasdaq to a three-month low, prompting investors to focus on other areas such as consumer staples and healthcare. The S&P 500 equally-weighted index hit a record high on Tuesday.
Fed verdict lands at 2 p.m. ET
The Federal Reserve's two-day policy meeting concludes Wednesday afternoon, with the interest rate decision set for 2 p.m. ET. A rate hike is unlikely, but not out of the question. Going into this week's meeting, markets saw 64% odds of no move and 36% odds of a quarter-point tightening.
Warsh plans to hold a press conference after the Fed's updated policy statement. Meta Platforms and Microsoft report after the close, and analysts see Meta's earnings rising less than 1% to $7.19 per share as revenue jumps 27% to $60.2 billion, according to FactSet. Microsoft's earnings are expected to rise 16% to $4.24 per share on revenue of $82.9 billion.
Sources: Investor's Business Daily, Investing.com, The Guardian
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