Wall Street closed mixed on Wednesday, but was pulled up somewhat by energy stocks. Investor sentiment was cautious as a sharply divided Federal Reserve stance on interest rates, surging crude oil amid Middle East tensions and uncertainty ahead of key earnings heightened anxiety. One of the three benchmark indexes ended in the red, while two remained virtually unchanged.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) slid 0.6%, or 280.12 points, to close at 48,861.81. Twenty-two components of the 30-stock index ended in negative territory, while eight ended in positive.
The tech-heavy Nasdaq Composite added 9.44 points, remaining virtually flat at 24,673.24.
The S&P 500 lost 2.85 points, or less than 0.1%, to close at 7,135.95. Seven of the 11 broad sectors of the benchmark index closed in the red. The Utilities Select Sector SPDR (XLU), the Materials Select Sector SPDR (XLB) and the Health Select Sector SPDR (XLV) declined 1.2%, 1.1%, 0.7% respectively, while the Energy Select Sector SPDR (XLE) advanced 2.4%.
The fear gauge CBOE Volatility Index (VIX) increased 5.5% to 18.81. A total of 16.4 billion shares were traded on Wednesday, lower than the last 20-session average of 17.8 billion. Decliners outnumbered advancers by a 2.52-to-1 ratio on the NYSE, and by a 2.27-to-1 ratio on the Nasdaq.
Dow Weighs on Markets as Fed Signals Affect Industrials
The Dow Jones Industrial Average fell about 280 points on Wednesday, as policy uncertainty hit large industrial and multinational stocks harder than the broader market. Crude surged after geopolitical tensions in the Middle East raised fears of supply disruptions through the Strait of Hormuz, increasing input costs for transport, manufacturing and consumer-facing Dow components.
At the same time, the Fed held interest rates steady, a decision marked by an 8-4 vote. This revealed an unusually divided stance among policymakers, the most fractured since the early 1990s. That split, along with lingering inflation concerns tied to energy prices, dampened confidence in a clear path for monetary policy. The price-weighted nature of the Dow Jones Industrial Average made it more sensitive to declines in a few high-priced stocks, amplifying losses. Meanwhile, the S&P 500 and Nasdaq Composite ended little changed, supported by resilience in technology shares and investor focus on upcoming earnings reports, which helped offset broader macroeconomic concerns.
Crude Prices Surge on Fears of Strait Disruption
Crude oil prices jumped after the White House confirmed that Donald Trump had instructed officials to prepare for a prolonged blockade of Iranian ports, raising alarm over global supply chains. The move signals potential disruptions to tanker traffic through the Strait of Hormuz, a vital corridor for a significant share of the world’s oil shipments. Any restriction in this narrow passage heightens the risk of supply shortages, pushing prices higher. Markets reacted swiftly, with traders pricing in sustained geopolitical tension and the likelihood of tighter crude availability in the near term.
Government data showed that U.S. commercial crude inventories had decreased by 6.2 million barrels per day for the week ended April 24. The number for the week prior was an increase of 1.9 million barrels per day. As a result, Brent crude rose for an eighth straight session, rising $6.77 or 6.1% to settle at $118.03 per barrel, the highest level since March 31.WTI crude rose $6.95, or 7%, to $106.88 a barrel, the highest since April 7.
Consequently, shares of Exxon Mobil Corporation XOM and Chevron Corporation (CVX) added 2.7% and 2.1%, respectively. Both currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Economic Data
The U.S. Census Bureau reported that Durable Orders for March had increased 0.8%, after the previously reported 1.4% decline for February was revised down to a decline of 1.2%.
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly reported that Building Permits for February had increased to 1,538,000. The number for January has been revised up to 1,386,000 from the previously reported 1,376,000. Housing Starts for February decreased to 1,356,000. The number for January was revised down to 1,398,000 from the previously reported 1,487,000.
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This article originally published on Zacks Investment Research (zacks.com).
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