[New York Stock Market Briefing] No panic selling despite Iran strikes… major indexes end mixed

U.S. stocks ended mixed on Wall Street, holding up despite U.S. and Israeli strikes on Iran.

On the 2nd (local time), at the New York Stock Exchange, the Dow Jones Industrial Average closed down 73.14 points (0.15%) from the previous session at 48,904.78.

In contrast, the large-cap Standard & Poor’s (S&P) 500 rose 2.74 points (0.04%) to 6,881.52, while the tech-heavy Nasdaq gained 80.64 points (0.36%) to finish at 22,748.85.

In the first New York trading session after the U.S.-Israeli strikes on Iran, panic selling—contrary to earlier fears—did not materialize. Major indexes opened broadly lower, but pared losses late in the session on bargain buying.

The move is seen as reflecting a growing view that geopolitical risks in the Middle East would not become protracted, including reports that Iran’s Supreme Leader Ayatollah Ali Khamenei was killed in the strikes.

U.S. President Donald Trump, in his first public remarks since the outbreak of the Iran war, said at a Medal of Honor ceremony at the White House in Washington, D.C., “I expected the Iran war to take 4 to 5 weeks, but (we) have the ability to sustain it longer than that.”

He added, “It doesn’t matter how long it takes,” saying, “We currently have the most powerful and overwhelming military in the world and will win easily.”

Sector moves were pronounced. With crude oil climbing on the Iran strikes, defense and refining stocks ended higher. Gains in Exxon Mobil (1.10%), Chevron (1.62%), Lockheed Martin (3.48%) and Northrop Grumman (6.30%) stood out.

Airlines, however, fell broadly amid flight cancellations such as those tied to the closure of Iranian airspace. Delta fell -1.86%, American Airlines -4.36% and United Airlines -3.02%, posting sizable declines.

Crude prices surged on reports that Iran’s Islamic Revolutionary Guard Corps had closed the Strait of Hormuz. The Strait of Hormuz is a strategic chokepoint through which about 20% of global seaborne crude shipments pass.

Brent futures for May delivery settled at $77.74 a barrel, up 6.7% from the previous session. Brent at one point jumped 13% intraday to $82.37, the highest level in about a year since January last year.

West Texas Intermediate (WTI) for April delivery also ended up 6.3% at $71.23 a barrel. WTI, too, briefly surged 12% intraday to $75.33, marking its highest level since June last year.

The spike in global oil prices dealt a direct blow to the bond market. U.S. Treasury prices fell on concerns of a renewed rise in inflation. The 10-year Treasury yield rose 8 bp (1 bp=0.01% point) to 4.04%. That is near the largest one-day rise since April last year.

By Noh Jeong-dong, Hankyung.com reporter dong2@hankyung.com