(Updates with afternoon trading)
* Micron Technology drops as higher spending plans draw scrutiny
* Brent crude climbs on Middle East tensions
* Small-cap Russell 2000 loses ground
* S&P 500 -0.68%, Nasdaq -0.77%, Dow -0.86%
By Noel Randewich and Utkarsh Hathi
March 19 (Reuters) – Wall Street fell on Thursday, with declines in Micron Technology and Tesla, as worries about inflation stemming from soaring oil prices left investors pessimistic about the potential for future interest rate cuts. Investors focused on warnings by Federal Reserve Chair Jerome Powell on Wednesday that the economic outlook remains uncertain amid a U.S.-Israeli war with Iran that has sent energy prices soaring and created fears of inflation. The Fed left rates unchanged, as expected.
Interest rate futures suggest traders see little chance of interest rate cuts before mid-2027, according to the CME’s FedWatch tool. Echoing the Fed, the Bank of England and European Central Bank held their interest rates steady and pointed to uncertainty arising from the Middle East conflict.
“The market is digesting a little bit more of Powell and what some other central banks said overnight, that this is a real inflation risk,” said Mike Dickson, head of research and quantitative strategies at Horizon Investments in Charlotte, North Carolina.
“The market isn’t pricing in any rate hike, but it has completely priced out all cuts this year.” Attacks on Iran’s South Pars gas field, along with the world’s largest gas plant in Qatar as well as on oil refineries in Saudi Arabia and Kuwait, sent Brent prices shooting above $119 a barrel and further fanned inflation fears.
The small-cap Russell 2000 index dipped 0.1% and was briefly down more than 10% from its January 22 record closing high. Micron Technology dropped 3.3% after the memory chipmaker’s quarterly forecast failed to impress investors who have sent its shares soaring 56% this year on strong demand related to AI. Tesla slid 2.8%. The National Highway Traffic Safety Administration escalated its probe into 3.2 million Tesla vehicles with Full Self-Driving driver-assistance on concerns the system may fail to detect or warn drivers in poor visibility.
The S&P 500 was down 0.68% at 6,579.33 points.
The Nasdaq declined 0.77% to 21,982.25 points, while the Dow Jones Industrial Average was down 0.86% at 45,829.71 points.
The S&P 500, Nasdaq and Dow were trading below their 200-day moving averages, underscoring a loss of momentum in the market.
The S&P 500 has lost about 4% in 2026 and is trading at four-month lows.
Ten of the 11 S&P 500 sector indexes declined on Thursday, led lower by materials, down 2.21%, followed by a 1.38% loss in consumer discretionary.
Wall Street’s fear gauge, the CBOE Volatility Index, climbed 0.5 points to 24.6. Prices of precious metals declined, weighing on miners Newmont and Freeport-McMoRan, down 8.6% and 4.8%, respectively. Data on Thursday showed weekly jobless claims unexpectedly fell last week, pointing to stable labor-market conditions and a rebound in job growth in March.
Declining stocks outnumbered rising ones within the S&P 500 by a 2.7-to-one ratio.
The S&P 500 posted 16 new highs and 26 new lows; the Nasdaq recorded 26 new highs and 259 new lows.
(Reporting by Johann M Cherian and Utkarsh Hathi in Bengaluru, and by Noel Randewich in San Francisco; Editing by Devika Syamnath, Anil D’Silva, Rod Nickel)
