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Stock Market News: The Dow Falls 500 Points
Markets took a downturn ahead of Friday's jobs report.
Last Updated:
April 4, 2024 at 7:45 PM EDT
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The major indexes took a sharp fall in afternoon trading, with the Dow Jones Industrial Average slipping 500 points.
Oil prices spiked on worries over the Middle East, and the 10-year Treasury yield dropped.
Investors had a lot of headlines to digest on geopolitics and the economy.
Several Fed officials were also scheduled to speak, including Patrick Harker, Thomas Barkin, Austan Goolsbee, Loretta Mester, and Neel Kashkari.
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Stocks closed sharply lower, with the Dow Jones Industrial Average clocking in its worst weekly performance in over a year.
The Dow Jones Industrial Average fell 530 points, or 1.4%, while the S&P 500 lost 1.2% and the tech-heavy Nasdaq Composite lost 1.4%.
All three indexes were in the green for most of the day.
Thursday's drop from session highs was the biggest blown gain for all the three indexes since mid-2023, according to Dow Jones Market Data.
Oil prices hit their highest level since October.
The 10-year yield saw the biggest decline in about two weeks to 4.308%. Yields drop when demand for Treasuries rises.
Markets had a lot to digest. Middle East tensions escalated after Israeli Prime Minister Benjamin Netanyahu indicated Israel would take an aggressive stance against Iran and its proxies. Earlier, the White House said President Joe Biden called for an “immediate ceasefire” in Gaza.
Eight Federal Reserve officials were on tap to speak Thursday. The Fed’s Neel Kashkari indicated that interest-rate cuts may not be needed at all this year if progress on inflation stalls.
Next up, investors are paying attention to the March jobs report.
Economists polled by FactSet expect a gain of 200,000 in payrolls, a healthy showing and not far off from February’s 275,000.
A higher-than-expected number could further dampen stocks as it might delay the timing and pace of interest rate cuts.
Still, Thursday’s decline will be tough to surpass. The S&P 500 fell 2% from its latest record level set a week ago, the largest drawdown since the the current market rally began in late October.
Crude futures shake off early uncertainty and settle higher as geopolitical tensions keep alive market concerns about tight supplies.
"The escalation of tensions in both Iran and Ukraine, coupled with OPEC+ confirming the continuation of production cuts until June, has fueled this extension of gains," says Rebecca Babin, senior energy trader at CIBC Private Wealth US in emailed comments.
While the outlook is positive for the next few months, downside risks include the possibility of OPEC+ bringing back some production, a possible weakening of demand and fewer-than-expected Fed interest-rate cuts, Babin adds.
WTI for May delivery settles up 1.4% at $86.59 a barrel, its highest settlement since Oct. 20, and June Brent rises 1.5% to $90.65 a barrel.
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Oil prices sharply rose mid-day Thursday.
Brent crude, the international standard, hit $90.93 a barrel, up 1.8% from its last close. West Texas Intermediate, the U.S. benchmark, rose to $86.72, up 1.5% after staying below Wednesday’s price through the day.
President Joe Biden spoke with with Israeli Prime Minister Benjamin Netenyahu on Thursday, where “he underscored that an immediate ceasefire is essential to stabilize and improve the humanitarian situation” in Gaza, the White House said.