NEW YORK (AP) — U.S. stocks are nudging lower on Tuesday, and oil prices are rising again. It’s a modest return to form for financial markets after worries had seemed to calm on Wall Street Monday.
The S&P 500 was down 0.3% in morning trading following signals that one of the U.S. economy’s main engines, spending by households, is weakening while Israel’s conflict with Iran may be worsening. The Dow Jones Industrial Average was down 89 points, or 0.2%, as of 10 a.m. Eastern time, and the Nasdaq composite was 0.4% lower.
Israel’s continuing fight with Iran has the potential to drive up prices for crude oil and gasoline because Iran is a major producer of oil, and it also sits on the narrow Strait of Hormuz, through which much of the world’s crude passes.
Crude prices climbed in their latest see-saw move after leaping roughly 7% on Friday and then calming on Monday with hopes that the fighting could remain relatively contained. A barrel of benchmark U.S. crude rose 2.6% to $72.12. Brent crude, the international standard, added 2.8% to $75.28 per barrel.
Often, higher oil prices will help stocks of companies in the solar industry because they increase the incentive to switch to alternative energy sources. But solar stocks tumbled amid worries that Congress may phase out tax credits for solar, wind and other energy sources that produce fewer emissions that change the Earth’s climate.
Enphase Energy dropped 23.6%, and First Solar fell 18.2%.
On the winning side of Wall Street was Jabil, which jumped 10.7% after reporting a stronger profit for the latest quarter than analysts expected. CEO Mike Dastoor credited strength from accelerated demand related to artificial-intelligence technology, among other things.
All of the action was taking place as the Federal Reserve got set to begin a two-day meeting on interest rates. The nearly unanimous expectation among traders and economists is that the Fed will make no move.
The Fed has been hesitant to lower interest rates, and it’s been on hold this year after cutting at the end of last year, because it’s waiting to see how much Trump’s tariffs will hurt the economy and raise inflation. Inflation has remained relatively tame recently, and it’s near the Fed’s target of 2%.
More important for financial markets on Wednesday will likely be the latest set of forecasts that Fed officials will publish for where they see the economy and interest rates heading in upcoming years.
In the bond market, the yield on the 10-year Treasury fell to 4.43% from 4.46% late Monday. The two-year yield, which more closely tracks expectations for what the Fed will do with its overnight interest rate, edged down to 3.96% from 3.97%.
In stock markets abroad, indexes fell across much of Europe after finishing mixed in Asia.
