NEW YORK (AP) — U.S. stocks are slipping in early trading, and crude oil prices are continuing to rise as the world waits to see how Israel will respond to a missile attack from Iran. The S&P 500 was 0.3% lower Wednesday, a day after sliding from its record on worries about a possible widening of the fighting in the Middle East. The Dow Jones Industrial Average was down 159 points, or 0.4%, and the Nasdaq composite was off 0.3%. Oil prices rose by more than 3%. Nike sank 7.4% after reporting revenue that fell short of analysts’ estimates and pulling its forecast for full-year results.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Wall Street pointed toward losses before markets opened and oil prices rose further amid escalating tensions between Israel and Iran in an already inflamed Middle East.
Futures for the S&P 500 and the Dow Jones Industrial Average were each down about 0.1% before the bell.
While Israel is not a major producer of oil, Iran is OPEC's third largest producer and the potential for a wider, sustained conflict raises the risk of disruptions to supplies by neighboring producers of crude. However, some analysts have been skeptical that the U.S. would experience massive oil shortages, since U.S. oil production is at an all-time high.
Early Wednesday, U.S. crude was up $2.11, or 3%, to $71.94 per barrel. Brent crude climbed $1.96 to $75.52 per barrel.
Israeli Prime Minister Benjamin Netanyahu vowed to retaliate against Iran, which he said “made a big mistake tonight and it will pay for it.” An Iranian commander threatened wider strikes on infrastructure if Israel retaliates.
Nike shares tumbled 7.2% after the shoe giant posted lackluster first-quarter results, including sales that came in lower than Wall Street was expecting. Nike, which is in the middle of a CEO transition, also pulled its full-year guidance and postponed its investors day conference. Its shares are down about 22% this year.
Shares of Humana shed close to 20% early Wednesday after the health insurer said a Medicare Advantage quality rating drop will hurt future bonus payments the company receives.
On Monday, the S&P 500 set an all-time high for the 43rd time this year. Stocks had been jumping on hopes the U.S. economy can continue to grow despite a slowdown in the job market, as the Federal Reserve cuts interest rates to give it more juice. The Fed last month lowered its main interest rate for the first time in more than four years, and it’s indicated it will deliver more cuts through next year.
The dominant question hanging over Wall Street is whether the cuts will ultimately prove to be too little, too late after the Fed earlier kept rates at a two-decade high in hopes of braking on the economy enough to stamp out high inflation.
Another threat to the economy could lie in a strike by dockworkers at 36 ports across the eastern United States that could snarl supply chains and drive up inflation.
The workers are asking for a labor contract that doesn’t allow automation to take their jobs, among other things. Supply chain experts say consumers won’t see an immediate impact because most retailers have stocked up on goods, moving ahead shipments of holiday gift items.
A debate Tuesday night between vice presidential candidates Democratic Gov. of Minnesota Tim Walz and Republican senator JD Vance drew scant market attention, analysts said.
“The market’s muted reaction says it all — traders are far more focused on pressing economic concerns and geopolitical risks than on the vice presidential showdown,” Stephen Innes of SPI Asset Management said in a commentary.
In Europe at midday, Germany's DAX rose 0.7% and the FTSE 100 in London ticked up 0.1%. In Paris, the CAC 40 picked up 0.2%.
Tokyo's Nikkei 225 lost 2.2% to 37,808.76. It has retreated since the ruling Liberal Democratic Party chose Shigeru Ishiba to lead the government, replacing Fumio Kishida, who stepped aside on Tuesday. Higher energy prices in Japan, which relies heavily on imported oil, gas and coal to power its industries, would add to Ishiba's burdens as he works to pep up the economy.
Hong Kong's Hang Seng roared 6.2% higher to 22,443.73, riding a wave of investor enthusiasm over recent moves by Beijing to rev up the Chinese economy with policies aimed at reviving the ailing property sector and supporting financial markets. With Shanghai and other markets in China closed, trading crowded into Hong Kong.
Elaine Kurtenbach And Matt Ott, The Associated Press
