US stocks finished mixed on Wednesday as renewed conflict between the United States and Iran drove oil prices sharply higher, with investors also assessing the latest Federal Reserve meeting minutes for clues on the direction of interest rates.
The Dow Jones Industrial Average closed more than 500 points, or around 1%, lower while the S&P 500 slipped 0.2%, although the Nasdaq Composite recovered from earlier weakness to edge 0.2% higher after technology shares steadied late in the session.
Markets reacted after US forces carried out what President Donald Trump described as a “series of powerful strikes” against Iran following attacks on three commercial vessels in the Strait of Hormuz.
Speaking in Ankara ahead of a NATO summit, Trump declared the US-Iran ceasefire agreement was “over”, describing further negotiations with Tehran as “a waste of time”, although he later suggested he did not expect the conflict to return to full-scale war even as he warned the US would “probably hit them hard again tonight”.
Energy markets strengthened after the US Treasury revoked a licence allowing Iranian oil exports, adding to concerns over global supply. West Texas Intermediate crude climbed above $74 a barrel while Brent traded close to $78 extending gains as traders weighed the risk of further disruption to shipping through the Strait of Hormuz.
The Federal Reserve’s June meeting minutes showed policymakers remained divided after holding interest rates unchanged at their first meeting under chairman Kevin Warsh. While several officials favoured leaving policy unchanged, a small number argued that higher rates could still be appropriate, highlighting differing views over inflation and economic conditions.
Among individual stocks, SpaceX extended recent losses despite its addition to the Nasdaq-100 index. Shares fell to an intraday record low of $145.20 before ending at $149.29, below the company’s $150 market debut price, with analysts suggesting expectations surrounding the index inclusion had already been reflected in the share price.
In London, the FTSE 100 closed 1.7% lower while the FTSE 250 lost 1.5%, after Iran warned vessels using the Strait of Hormuz to follow authorised routes following recent attacks on commercial shipping.
Higher crude prices supported oil producers, with BP rising 3.5% and Shell adding 2.3%, although airlines weakened on concerns over increased fuel costs and potential disruption to regional air travel.
British Airways owner IAG fell 4.8% and Wizz Air lost 5.0%, while mining shares also retreated as weaker metal prices pushed Antofagasta, Endeavour Mining, Anglo American and Rio Tinto lower.
Warehouse developer Segro slipped 1.8% despite outlining long-term growth ambitions, saying its industrial and logistics development pipeline could generate an additional £429 million in headline rent while opportunities in Europe’s expanding data centre market could add a further £460 million in future income.
