WASHINGTON (dpa-AFX) - After moving sharply lower in morning trading on Tuesday, stocks regained ground over the course of the sessions. The major averages climbed well off their worst levels of the day, with the Dow reaching positive territory.
The tech-heavy Nasdaq staged a notable recovery attempt after tumbling by as much as 2 percent but still ended the day down 185.92 points or 0.7 percent at 26,088.20.
The S&P 500 also slipped 11.88 points or 0.2 percent to 7,400.96, while the narrower Dow inched up 56.09 points or 0.1 percent to 49,760.56.
An extended surge by the price of crude oil contributed to the early sell-off on Wall Street, with U.S. crude oil futures soaring by more than 4 percent and jumping back above $100 a barrel.
The continued increase by the price of crude oil comes as the U.S. and Iran struggle to reach an agreement to end the war and reopen the critical Strait of Hormuz.
President Donald Trump told reporters on Monday that the U.S.-Iran ceasefire is on 'life support' amid the ongoing dispute, describing the state of the truce 'unbelievably weak.'
The weakness on Wall Street also came following the release of a report from the Labor Department showing the fastest annual rate of consumer price growth since May 2023.
The report said the annual rate of growth by consumer prices accelerated to 3.8 percent in April from 3.3 percent in March, reflecting sharply higher energy prices.
Selling pressure waned over the course of the session, however, as U.S. stocks have recently been able to shrug off concerns about the impact of the Middle East conflict amid upbeat earnings news.
'Given that inflation is heading in the wrong direction and the labor market is holding up, it's very unlikely that the Fed will be able to lower interest rates any time soon and it's possible that we may start pricing in rate hikes for next year,' said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.
He added, 'We don't believe the market needs rate cuts to keep climbing, but earnings will need to keep doing a lot of the heavy lifting as multiple expansion isn't in the cards right now.'
Sector News
Computer hardware and semiconductor stocks saw significant weakness on the day, contributing to the pullback by the tech-heavy Nasdaq.
Reflecting the weakness in the sectors, the NYSE Arca Computer Hardware Index plunged by 3.6 percent and the Philadelphia Semiconductor Index tumbled by 3 percent.
Considerable weakness was also visible among airline stocks, as reflected by the 2 percent slump by the NYSE Arca Airline Index.
Networking, steel and software stocks also saw notable weakness, while oil service stocks surged along with the price of crude oil, driving the Philadelphia Oil Service Index up by 2.2 percent.
Healthcare, biotechnology and pharmaceutical stocks also turned in strong performances, helping limit the downside for the broader markets.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday. South Korea's Kospi dove by 2.3 percent and China's Shanghai Composite Index dipped by 0.3 percent, although Japan's Nikkei 225 Index bucked the downtrend and rose by 0.5 percent.
The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index closed just below the unchanged line, the French CAC 40 Index slumped by 1 percent and the German DAX Index tumbled by 1.6 percent.
In the bond market, treasuries moved notably lower, extending the downward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 5.3 basis points to a ten-month closing high of 4.463 percent.
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