Wall Street falls on tensions over Syria, interest rate worries
WALL STREET stocks fell on Wednesday as possible US military action against Syria stoked investor concerns about geopolitical risk to the American economy and minutes from the Federal Open Market Committee sparked worries about a more hawkish view on interest-rate increases. The decline followed two days of gains, driven by easing concerns about trade tensions between the United States and China.
NEW YORK — Wall Street stocks fell on Wednesday as possible US military action against Syria stoked investor concerns about geopolitical risk to the American economy and minutes from the Federal Open Market Committee (FOMC) sparked worries about a more hawkish view on interest rate increases.
The decline followed two days of gains, driven by easing concerns about trade tensions between the United States and China.
On Wednesday, US President Donald Trump warned Russia of imminent military action in Syria, declaring missiles “will be coming.”
The rising tensions sent oil prices surging, boosting energy stocks by 1%. But the risk- off sentiment weighed on Treasury yields, pushing financial stocks down 1.3%.
“There’s general nervousness about what might happen with any strikes and the potential escalation of tensions with Russia,” said Anwiti Bahuguna, senior portfolio manager at Columbia Threadneedle Investments in Boston.
The major Wall Street indexes edged even lower after minutes from the FOMC showed concern among a few of its members that rising inflation might require a faster pace of interest rate hikes than anticipated.
Members of the Federal Reserve voted unanimously to raise borrowing costs by a quarter percentage point and expressed confidence that the economy would strengthen and inflation would rise in coming months.
“The minutes were modestly negative,” said John Carey, portfolio manager at Amundi Pioneer Asset Management in Boston.
“People had been speculating that due to all the turbulence in the market because of geopolitical uncertainties that the Fed might consider pausing or slowing down the interest rate increases,” he added.
The Dow Jones Industrial Average fell 218.55 points or 0.90% to 24,189.45; the S& P 500 lost 14.68 points or 0.55% to 2,642.19; and the Nasdaq Composite dropped 25.27 points or 0.36% to 7,069.03.
Advancing issues outnumbered declining ones on the NYSE by 1.03 to 1; on Nasdaq, a 1.06to-1 ratio favored decliners. The S&P 500 posted six new 52-week highs and two new lows; the Nasdaq Composite recorded 46 new highs and 27 new lows. Volume on US exchanges was 6.04 billion shares, compared with the 7.29 billion share average for the full session over the last 20 trading days. —