US Stocks Drop Amid West Asia Uncertainty

NEW YORK, March 27 (Bernama-Xinhua) -- United States (US) stocks accelerated their losses on Thursday as conflicting messages from the United States and Iran fuelled uncertainty regarding the war, Xinhua reported.

The Dow Jones Industrial Average fell 1.01 per cent to 45,960.11. The S&P 500 sank 1.74 per cent to 6,477.16. The Nasdaq Composite Index shed 2.38 per cent to 21,408.08.

Eight of the 11 primary S&P 500 sectors ended in red, with communication services and technology leading the laggards by dropping 3.46 per cent and 2.74 per cent, respectively. Energy and utilities added 1.57 per cent and 0.23 per cent, respectively.

Financial markets continued to be heavily influenced by the hostilities involving the US, Israel, and Iran. Both Tehran and Tel Aviv launched military strikes on Thursday amid growing international warnings about the conflict's severe economic costs.

The involved parties remain deadlocked over a potential ceasefire. US President Donald Trump escalated his rhetoric during the day, warning Iran to "get serious" and reach an agreement before it becomes "too late." However, equities managed to briefly pare some of their steep morning losses following reports that Iran had formally responded to a US truce proposal.

Geopolitical volatility drove global oil prices higher again. International benchmark Brent crude futures held above US$108 per barrel, while US benchmark West Texas Intermediate advanced past US$94 per barrel.

Investors are also closely assessing how heavily the Federal Reserve will weigh the sudden oil price spike during its upcoming monetary policy deliberations.

On the economic data front, the US Bureau of Labour Statistics reported Thursday that initial claims for state unemployment benefits totaled 210,000 for the week ending March 21, matching market expectations.

"We expect the unemployment rate to rise 0.2 percentage point in total to 4.6 per cent by the third quarter, partly because of this impact from the oil shock and partly because job growth is already running at a pace that we think is a bit too slow to keep up with labour supply growth," Goldman Sachs economist Pierfrancesco Mei wrote in a note.

Meanwhile, in the bond market, the yield on the benchmark 10-year US Treasury note rose to 4.42 per cent, further contributing to the pressure on equities.

In corporate developments, shares of most of the "Magnificent Seven" technology giants finished the session lower.

Beyond the technology sector, furniture manufacturer MillerKnoll saw its stock plummet 22.37 per cent after issuing weak current-quarter financial guidance. The Michigan-based company explicitly attributed the anticipated downturn to the direct impacts of the West Asia conflict, citing expectations of minimal shipments to the region and significantly higher logistical costs. 

-- BERNAMA-XINHUA