Global stocks are rattled, oil soars as tensions mount in Middle East
NEW YORK (Reuters) – Global equity markets slid on Wednesday as US President Donald Trump warned Russia that missiles “will be coming” in Syria after a suspected chemical attack, and oil hit its highest since 2014 after Saudi Arabia said it intercepted an air strike over Riyadh.
The fallout from new US sanctions on Moscow has rattled investors, and fears of military action were stoked after one of Russia’s ambassadors reiterated it would shoot down any US missiles fired at Syria.
Trump, who has criticized Russia for standing by Syrian President Bashar al-Assad, shot back in a message on Twitter on Wednesday.
“Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and ‘smart!’,” he wrote in the post. “You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!”
In response, Russia’s Foreign Ministry said in a Facebook post that “smart missiles should fly towards terrorists, not towards the lawful government.”
In afternoon trading, the Dow Jones Industrial Average fell 129.86 points, or 0.53%, to 24,278.14, the S&P 500 lost 5.99 points, or 0.23%, to 2,650.88, and the Nasdaq Composite added 8.66 points, or 0.12%, to 7,102.96.
Facebook and Netflix helped to pare losses in the S&P 500 and Nasdaq.
Facebook Inc. shares were up 1.5% as chief executive Mark Zuckerberg gave a second day of testimony before the US Congress. Netflix shares climbed more than 3% following a Goldman Sachs target-price increase $60 above Wall Street’s median price target of $300.
The pan-European FTSEurofirst 300 index lost 0.60%, and MSCI’s gauge of stocks across the globe shed 0.16%.
Emerging-market stocks rose 0.14%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.04% higher, while Japan’s Nikkei lost 0.49%.
“It feels like there are expectations that the US is going to take some action against Syria,” said Phil Blancato, the chief executive of Ladenburg Thalmann Asset Management in New York. “The market, I don’t believe, has priced one yet.”
Investors’ nerves were rattled just a day after worries eased on a more conciliatory tone on trade between Trump and Chinese President Xi Jinping.
Meanwhile, oil prices hit their highest in more than three years after Trump’s latest comments despite bearish inventory numbers.
US crude rose 2% to $66.82 per barrel, and Brent was last at $72.07, up 1.45% on the day.
Oil prices began to climb on Trump’s warning over Syria, then rallied further on a report that Saudi Arabia’s air-defense forces intercepted a missile over Riyadh, the capital.
The dollar fell against the yen, hitting a two-week low over lingering worries of a trade war with China and domestic scandals swirling around Trump.
The dollar index fell 0.08%, with the euro up 0.12% to $1.2369.
The Japanese yen strengthened 0.33% versus the greenback to 106.85 per dollar, while Sterling was last trading at $1.4183, up 0.08% on the day.
The Russian ruble slumped as much as 2.5% against the dollar and even more versus the euro.