The major averages pulled back following the U.S. airstrike in Iraq that killed Iran's top military commander, sending oil prices surging and ratcheting up geopolitical concerns. President Trump said the U.S. was not trying to start a war or seek regime change in Iran, but the airstrike did provide an excuse for investors to reduce exposure from a market trading at record highs.
The Dow Jones Industrial Average closed down 233 points or 0.6% at 28,634, its biggest one-day loss since early December. The S&P 500 also had its worst day in a month, sliding 0.7% to 3,234. The Nasdaq Composite dropped 0.8% to 9,020. The Dow briefly dropped more than 360 points at the open. The major averages recovered some ground later in the session as oil prices came off their lows.
U.S. crude oil futures settled up 3% at $63.05 per barrel and briefly gained 4.8%, raising concerns about an energy shock on the global economy. Airline stocks fell broadly on the threat of higher oil prices. United, American and Delta all dropped more than 1.6%.
Energy stocks such as Concho Resources and Apache went up 3.7% and 1.3%, respectively. Devon Energy climbed 1.2%. The U.S. Aerospace & Defense sector rose a percent on speculation of increased government spending. Gold futures increased 1.6% to $1552.40/ozt.
The 2-yr yield fell six basis points to 1.51%, and the 10-yr yield fell nine basis points to 1.79%. The U.S. Dollar Index increased 0.1% to 96.90.