Major US equity benchmarks sank on Thursday as crude oil prices climbed to $100 a barrel and on mounting jitters in the private credit sector.
At 9:55 a.m. ET, the Dow Jones Industrial Average fell 582.01 points, or 1.23%, to 46,835.26, the S&P 500 lost 76.10 points, or 1.12%, to 6,699.50 and the Nasdaq Composite lost 312.95 points, or 1.38%, to 22,403.18.
At the open, the Dow Jones Industrial Average fell 174.7 points, or 0.37%, to 47242.52. The S&P 500 fell 34.9 points, or 0.52%, to 6740.88, while the Nasdaq Composite dropped 189.5 points, or 0.83%, to 22526.585.
The Middle Eastern conflict drove crude valuations back toward $100 a barrel this Thursday as two tankers were set ablaze in Iraqi waters in apparent Iranian strikes.
Iran has intensified its strikes, intended to inflict sufficient financial distress to compel the United States and Israel to cease the hostilities they initiated on February 28, focusing on petroleum sites and processing plants.
Tehran’s maneuvers have effectively halted maritime commerce through the narrow Strait of Hormuz, where a fifth of the world’s oil usually travels.
Experts warned that if the Hormuz corridor stays blocked, fuel costs could escalate to $150 per barrel with significant speed.
Goldman Sachs Group Inc. cautioned that petroleum costs might surpass the 2008 record if Hormuz transit remains restricted through March, it said in a research briefing revising its price outlook. Brent surged to a peak of $147.50 per barrel that year due to skyrocketing demand and stagnant output.
Iran’s newly appointed Supreme Leader, Ayatollah Mojtaba Khamenei, declared the Strait of Hormuz must stay shut, reported Iranian national television. Mojtaba indicated no plans to lift the waterway’s forced blockade.
The Iranian conflict is triggering unparalleled instability in energy markets, impacting 7.5% of worldwide supply and an even larger portion of international shipments, according to a report from the International Energy Agency.
Market participants are examining the approximately $2 trillion private debt sector after a sequence of liquidity problems emerged lately, and Swiss-based Partners Group cautioned that non-payment frequencies in private lending might potentially two-fold over the coming few years.
Key Stock Movers
Morgan Stanley stock tumbled 4.3% after the bank limited redemptions at one of its private credit funds following similar actions by Blackstone and BlackRock earlier this month.
Blackstone and BlackRock fell over 1% each.
Citigroup and Goldman Sachs also fell over 3%.
Stocks of cruise operators Norwegian and Royal Caribbean dropped more than 2.5% each.
Energy shares gained with Occidental rising 3.3% and ConocoPhillips added over 1.4%.
Bumble stock rallied 37% after the dating app operator reported fourth quarter revenue above estimates.
Bullion Market
Gold prices were steady on Thursday, as safe-haven demand was offset by a stronger US dollar.
By 9:11 a.m. ET (1311 GMT), spot gold was little changed at $5,183.39 per ounce. US gold futures for April delivery rose 0.2% at $5,190.50.
Among other metals, spot silver rose 1.6% to $87.19 per ounce. Spot platinum added 0.7% to $2,184.00, while palladium rose 1.6% to $1,666.70.
