(Updates to mid-afternoon trading)
* Indexes down: Dow off 0.07%, S&P 500 down 0.47%, Nasdaq drops 0.97%
* Q4 GDP slashed in half, PCE inflation remains elevated, capital goods orders disappoint
* Meta drops following report of AI rollout postponement
* Adobe falls after CEO Shantanu Narayen to leave amid AI disruption worries
By Stephen Culp and Johann M Cherian
NEW YORK, March 13 (Reuters) – Wall Street was lower on Friday as investors monitored developments in the war on Iran and their potential effects on the global oil supply, nearing the end of a week in which markets whipsawed in tandem with crude prices.
All three major U.S. equity indexes were lower on the day, with tech weakness weighing the Nasdaq down the most, and were on course for weekly declines. Crude prices fluctuated before inching north of $100 per barrel, even after U.S. President Donald Trump temporarily eased sanctions on Russian oil in an effort to ease supply concerns.
“Tell me what oil prices will do today and I will tell you what stocks will do today,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “(Stocks) have had some steep declines, but in some cases they cut most of the earlier losses or even reversed in some cases.”
“I suspect that’s going to continue to happen,” Cardillo added. Trump’s vow to hit Iran “very hard over the next week,” combined with reports that the conflict had spread to Lebanon, Kuwait, Iraq, the United Arab Emirates, Bahrain and Oman, has dimmed hopes of de-escalation and near-term resolution. Trump’s comments prompted Iran to tighten its grip on the Strait of Hormuz, conduit for one-fifth of the world’s oil. On Thursday, the International Energy Agency said the war will cause the largest-ever disruption in global crude supply. A deluge of mostly disappointing economic indicators was dominated by the Commerce Department’s sharp downward revision to fourth-quarter GDP growth, which slashed its previously-stated estimate in half, to 0.7%. The Personal Consumption Expenditures report showed little movement in the U.S. Federal Reserve’s preferred inflation gauge, while other data showed weakening demand for durable goods. Despite softer economic data, the U.S. Federal Reserve was expected to leave its key interest rate unchanged at the conclusion of next week’s monetary policy meeting. With the threat of spiking oil prices further stoking inflation, the odds of a near-term rate cut are dwindling.
“Inflation remains elevated, and with the possibility of energy prices eventually moving into the pipeline, the Fed is likely to stay on hold for a longer period of time,” Cardillo said.
The Dow Jones Industrial Average fell 33.00 points, or 0.07%, to 46,644.85, the S&P 500 lost 31.21 points, or 0.47%, to 6,641.41 and the Nasdaq Composite lost 208.95 points, or 0.94%, to 22,103.03.
Among the 11 major sectors of the S&P 500, communication services were down most. Utilities enjoyed the largest percentage gain.
Amid mounting concerns over credit quality, the S&P 500 financial sector fell 3.3% on the week. Design software maker Adobe fell 5.3% as longtime CEO Shantanu Narayen will leave his role once a successor is appointed, renewing worries around its strategy as it grapples with AI disruption. Meta Platforms slid 4.1% after a report said the social media behemoth has postponed the release of its artificial intelligence model “Avocado” to at least May.
Declining issues outnumbered advancers by a 1.62-to-1 ratio on the NYSE. There were 55 new highs and 135 new lows on the NYSE.
On the Nasdaq, 1,623 stocks rose and 2,986 fell as declining issues outnumbered advancers by a 1.84-to-1 ratio.
The S&P 500 posted 13 new 52-week highs and 8 new lows while the Nasdaq Composite recorded 29 new highs and 167 new lows.
(Reporting by Johann M Cherian, Utkarsh Hathi in Bengaluru, Stephen Culp in New York; Editing by Maju Samuel, Devika Syamnath and David Gregorio)
