Wall Street Closes Lower as Middle East Tensions Escalate; ServiceNow Slides 18%

The three major U.S. stock indexes closed lower as military tensions between the U.S. and Iran flared again after a second round of ceasefire talks collapsed.

On April 23, the Dow Jones Industrial Average fell 179.71 points, or 0.36%, to 49,310.32 on the New York Stock Exchange. The S&P 500 dropped 29.50 points, or 0.41%, to 7,108.40, while the Nasdaq Composite slid 219.06 points, or 0.89%, to 24,438.50.

The S&P 500 and Nasdaq, both of which set record highs a day earlier, touched fresh intraday records early in the session before turning lower on war-related headlines involving Iran, highlighting sharp volatility.

Investors were particularly sensitive to tensions surrounding the Strait of Hormuz. President Donald Trump said he had ordered the sinking of any vessel that lays mines in the waterway.

The U.S. military has also stepped up its maritime blockade, including by seizing another tanker carrying Iranian oil in the Indian Ocean outside the Strait of Hormuz. It also deployed the Nimitz-class aircraft carrier George H.W. Bush to waters near the Middle East.

Iran, meanwhile, said it would not join negotiations as long as the U.S. maritime blockade remained in place and added that it was prepared to respond to further threats.

Concerns deepened after reports that Tehran's air defense system had been activated following the ceasefire. Iranian media reported that air defenses were reactivated after hostile targets were detected. No details were provided on the targets or any damage.

Israel's defense minister also said the country was ready to resume war with Iran and was awaiting U.S. approval.

International oil prices extended their surge for a fourth straight session. June Brent crude futures settled 3.1% higher at $105.07 a barrel, while June West Texas Intermediate crude rose 3.11% to $95.85. Over the past four trading days, Brent and WTI have gained 16.25% and 14.31%, respectively.

Software stocks were among the weakest performers. IBM tumbled 8.25% even after reporting revenue and net income above market expectations, as its full-year outlook failed to meet investors' standards.

ServiceNow sank 17.75% as the war in the Middle East slowed growth in subscription revenue. The drop weighed on large-cap technology shares including Microsoft, which fell 4%, and Palantir, which lost 7%.

Still, corporate earnings have helped cushion the market despite geopolitical anxiety. Bloomberg News reported that 80% of S&P 500 companies that have posted first-quarter results have delivered earnings surprises.

After the close, Intel jumped in extended trading after issuing an upbeat earnings outlook, helping revive sentiment in semiconductor and technology stocks that had weakened during the regular session.

Scott Ladner, chief investment officer at Horizon, said the half-life of the market's reaction to specific headlines has become much shorter over the past two to three weeks, adding that the market's broader direction is ultimately converging with fundamentals.

Chris Campitsis of Barnum Financial Group said stocks are trying to stabilize after an astonishing rebound from the March lows. He added that the market is likely to move sideways in the near term as investors wait for the next catalyst.

Ko Jeong-sam, Hankyung.com reporter jsk@hankyung.com