WASHINGTON (dpa-AFX) - After another sell-off at the start of trading on Tuesday, stocks once again staged a recovery attempt but did have as much success as Monday and still ended the day notably lower.
While the major averages climbed well off their worst levels of the day, they remained firmly in negative territory.
The Dow ended the day down 403.51 points or 0.8 percent at 48,502.27 after plummeting by more than 1,200 points to its lowest intraday level in almost three months.
The Nasdaq slumped 232.17 points or 1.0 percent to 22,516.69 and the S&P 500 slid 64.99 points or 0.9 percent to 6,816.63. The indexes had plunged by as much as 2.7 percent and 2.5 percent, respectively, hitting three-month lows.
The early nosedive on Wall Street came 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, raising worries the jump in prices will lead to higher inflation.
The extended surge in oil prices came 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.
Supply concerns were also worsened by the attacks on several oil refineries, including Saudi Aramco's oil facility in Ras Tanura.
'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
Despite the recovery attempt by the broader markets, gold stocks continued to see substantial weakness amid a sharp pullback by the price of the precious metal.
The NYSE Arca Gold Bugs Index plummeted by 8.0 percent, pulling back further off the record closing high set last Friday.
Significant weakness also remained visible among semiconductor stocks, as reflected by the 4.6 percent plunge by the Philadelphia Semiconductor Index.
Steel, computer hardware, networking and oil service stocks also saw considerable weakness, while software stocks bucked the downtrend.
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 climbed well off their worst levels but still ended the day slightly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by nearly a basis point to 4.056 percent after reaching a high of 4.117 percent.
Looking Ahead
Reports on private sector employment and service sector activity are likely to attract attention on Wednesday, although the spotlight may remain on the latest developments in the Middle East.
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