WASHINGTON (dpa-AFX) - Stocks moved sharply lower at the start of trading on Tuesday and have seen further downside over the course of the session. The steep drop comes after the major averages recovered from an initial sell-off on Monday to end the day mixed.
Currently, the major averages are off their lows of the session but still substantially negative. The Dow is down 1,099.64 points or 2.3 percent at 47,805.14, the Nasdaq is down 540.33 points or 2.4 percent at 22,208.53 and the S&P 500 is down 148.75 points or 2.2 percent at 6,732.87.
The nosedive on Wall Street comes amid concerns about the fallout from the ongoing conflict in the Middle East.
As the conflict entered its fourth day, U.S. President Donald Trump suggested the war may last four to five weeks but could 'go far longer than that.'
Secretary of Defense Pete Hegseth also offered few details about the duration of the operation against Iran but claimed it will not be 'endless,' framing the conflict as a 'generational' chance to reshape the Middle East.
The price of crude oil has continued to spike in response to the conflict, leading to worries the jump in prices will lead to higher inflation.
The extended surge in oil prices comes amid news Iran has closed the Strait of Hormuz in retaliation for the U.S. and Israeli attacks and threatened to fire on any ship trying to pass through the vital waterway.
'The longer oil and natural gas prices remain elevated, the greater the risk of a meaningful impact on inflation which could mean higher interest rates, an event that's typically negative for equity markets,' said Dan Coatsworth, head of markets at AJ Bell.
Sector News
Gold stocks have moved sharply lower on the day, resulting in an 8.8 percent nosedive by the NYSE Arca Gold Bugs Index. The index is pulling back further off the record closing high set last Friday.
The sell-off by gold stocks comes amid a substantial pullback by the price of the precious metal, with gold for April delivery plummeting $224.90 or 4.2 percent to $5,086.70 an ounce.
Significant weakness is also visible among computer hardware stocks, as reflected by the 5.5 percent plunge by the NYSE Arca Computer Hardware Index.
Steel, semiconductor, airline and brokerage stocks are also seeing considerable weakness amid broad-based selling pressure on Wall Street.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Tuesday. Japan's Nikkei 225 Index plunged by 3.1 percent, while China's Shanghai Composite Index slumped by 1.4 percent.
The major European markets have also shown substantial moves to the downside on the day. While the German DAX Index is down by 4.0 percent, the French CAC 40 Index is down by 3.5 percent and the U.K.'s FTSE 100 Index is down by 3.3 percent.
In the bond market, treasuries have climbed off their early lows but remain in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.7 basis points at 4.075 percent.
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