U.S. stock indexes slipped on the last trading day of August after the U.S. and Iran traded strikes over the Strait of Hormuz, pushing crude oil higher. Even so, the Dow, S&P 500, and Nasdaq are all closing the month higher, as earnings growth kept the market climbing despite the headwinds.
The Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite all fell on Monday as fighting between the U.S. and Iran reignited over the weekend. Yet none of it stopped August from ending in the green.
Iran strikes send oil higher, drag stocks down
U.S. forces hit two Iranian rocket launchers on Larak Island in the Strait of Hormuz on Sunday, the first acknowledged strike on Iranian soil since late July, and Iran fired back at two American bases in Jordan. Brent crude jumped about 2.8% back above $90 a barrel, and the United States Oil Fund rose 2.5%.
The Dow slipped 0.56%, roughly 315 points, as of 12:10 p.m. ET, while the S&P 500 fell 0.43% and the Nasdaq Composite dropped 0.34%. Twenty-three of the Dow's 30 components fell that morning. Energy stocks were the exception, rising 0.9% as more than two-thirds of energy names gained.
No single Dow member moved more than 2.4% in either direction, so the index's score came down to its heaviest weights. Goldman Sachs and Caterpillar did the most damage, each off by about 1%, while Alphabet dropped 2.3% and led the S&P 500 and Nasdaq lower. Tesla bucked the trend, climbing 5.2% after cutting the entry-level Model 3 price in Hong Kong and Macau by about 8.5%, a move investors read as Tesla defending demand in a competitive market.
A turbulent month still finishes higher
Despite the day's losses, the Dow is up 1.4% for August, its fifth straight monthly gain. The S&P 500 and Nasdaq are headed for their first up months since May, rising 2.4% and 3.5% respectively. Both the S&P 500 and Dow hit record highs during the month, while the Nasdaq fell just short of its early-June record.
The gains came despite a six-month war keeping oil prices elevated, inflation driving Treasury yields higher, and a new Fed chair openly worried about prices. None of those pressures went away; earnings growth carried the market anyway.
Source: Motley Fool
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