Iran deal reaction: Mixed stocks

U.S. stocks were mixed after President Donald Trump’s decision to scrap a nuclear deal with Iran sparked concern it could increase geopolitical tensions. The dollar rose and Treasury yields pushed higher.

The S&P 500 Index was little changed as banks advanced and utility stocks slumped. West Texas crude sank as much as 4.4 percent before paring the loss in a volatile trading session as investors digested what the Iran move could mean for energy supplies. The greenback strengthened for a third day. Ten-year Treasury yields rose toward 3 percent after JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon warned a climb to 4 percent may be coming.

Concern about an increase in geopolitical tension is weighing on global sentiment at the same time worries about pricey stocks and rising borrowing costs are bubbling up amid higher Treasury yields and a stronger dollar. Sanctions on Iran could potentially disrupt supplies from OPEC’s third-largest producer and open an uncertain new chapter for the Middle East.

“I don’t think there’s anything that’s a major surprise — the announcement was well advertised,” said Ernie Cecilia, the chief investment officer at Bryn Mawr Trust Co. “What seems to be a little surprise is that it didn’t allow for a whole lot of other possibilities, if you want to call it that. He was a little more specific, he was pretty straightforward.”

Elsewhere, Argentina’s peso pared losses after the government was said to be in talks with the International Monetary Fund for a $30 billion flexible credit line to help defend the currency after it dropped to a record. Italian shares tumbled on the prospect for fresh elections that may boost the chances of a populist government taking power. Indonesia’s rupiah sank to its weakest since 2015, and the nation’s government bonds slumped. Turkey’s lira hit another low and the country’s benchmark equity index fell.