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HomeMarket NewsDow Jones sinks over 700 points as oil, private credit worries rattles Wall Street
Brent Crude was back above the mark of $100 a barrel, closing above that mark for the first time since 2022. More ships were struck in the Persian Gulf overnight and comments from Iran's new Supreme Leader, Mojtaba Khamenei, added to the price surge. Khamenei said that the Strait of Hormuz should remain shut as a tactic to "pressure the enemy."
Benchmark indices on Wall Street sank on Thursday as oil prices rallied past the $100 per barrel mark yet again amidst no signs of an off-ramp on the war in West Asia. Stress in the $1.8 trillion private credit market swept banking and asset manager shares, adding to the negative sentiment.
The Dow Jones fell over 700 points to close below the mark of 47,000 for the first time in 2026. The S&P 500 and Nasdaq also fell prey to the selling pressure, ending 1.6% and 1.8% lower respectively. All the three benchmark indices fell to their lowest level of 2026 so far.
Futures on Wall Street this morning are trading with modest gains so far.
Brent Crude was back above the mark of $100 a barrel, closing above that mark for the first time since 2022. More ships were struck in the Persian Gulf overnight and comments from Iran's new Supreme Leader, Mojtaba Khamenei, added to the price surge. Khamenei said that the Strait of Hormuz should remain shut as a tactic to "pressure the enemy."
The US Dollar index strengthened to the highest in two months and is nearing the mark of 100, while the yield on the 30-year treasury note surged to 4.9% on worries about the cost of the US-Iran war. A $22 billion auction of the said note drew strong demand after the yields went up by 20 basis points since the start of the war.
Adding to the pain on Wall Street is the stress in the $1.8 trillion private credit market, with Morgan Stanley joining the list of firms capping redemptions in one of its private credit funds. The stock fell over 4%, the KBW Bank index fell 2.5%, its sixth straight day of declines.
In afterhours trading, shares of Adobe fell 7% after a tepid forecast and after announcing that CEO Shantanu Narayen will quit after 18 years at the helm of the software services provider.
The focus later today will be on the PCE inflation report, the first revision of the Q4 GDP data as well as the consumer spending report for January. The PCE is the Fed's preferred inflation gauge.
