Major indexes plunge more than 1% on escalation, oil shock and Powell’s hawkish message [New York market briefing]

U.S. stocks tumbled across the board as crude prices spiked on reports that energy facilities in the Middle East were hit. Even as the U.S. central bank (Fed) held rates steady, “hawkish” remarks by Fed Chair Jerome Powell—signaling a preference for tighter policy—also chilled investor sentiment.

On the 18th (local time), at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell 768.11 points (1.63%) from the previous session to close at 46,225.15.

The S&P 500 slid 91.39 points (1.36%) to 6,624.70, while the Nasdaq Composite dropped 327.11 points (1.46%) to finish at 22,152.42.

Oil prices, which had briefly shown signs of stabilizing, surged on the day, as Israel bombed Iran’s largest gas field and Iran, in retaliation, launched airstrikes targeting energy facilities in neighboring countries.

Israel attacked South Pars—Iran’s largest gas field—and a natural-gas processing complex in Asaluyeh on Iran’s southwestern coast. Iran responded with missile strikes on gas-concentrated facilities in Qatar, which accounts for 20% of global liquefied natural gas (LNG) supply.

Brent crude futures for May delivery settled at $107.38 a barrel, up 3.8% from the previous session. U.S. West Texas Intermediate (WTI) futures for April delivery settled at $96.32 a barrel, up 0.1%.

Inflation data also unsettled markets. The U.S. Department of Labor said February producer price index (PPI) rose 0.7% month-on-month, sharply above the consensus forecast (0.3%). The year-on-year increase was 3.4%, the highest in a year.

At the Federal Open Market Committee (FOMC) meeting that concluded in March, Fed Chair Powell voiced concern that higher oil prices could add to inflationary pressures and weigh on U.S. economic growth. The Fed held its benchmark interest rate unchanged at 3.50–3.75%.

“While we expect inflation to ease to some extent, it won’t be as much as we had hoped,” Powell said, adding, “The rate outlook depends on economic performance, and if the economy does not make progress, there will be no rate cuts.”

Micron, widely seen as a bellwether for the memory-chip industry, fell 2% in after-hours trading despite posting a “surprise” earnings beat. Micron said quarterly revenue came in at $23.8 billion and earnings per share at $12.2—both well above market expectations.

However, with investor expectations having risen too high and amid concerns over a widening Middle East war, the stock’s gains lost momentum.

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