US stock markets ended with mixed results early Wednesday, July 9, Beijing time. Tensions in the Middle East flared anew, driving a sharp increase in oil prices after US President Donald Trump stated at a NATO summit that a ceasefire with Iran was "over." Additionally, the minutes from the Federal Reserve's June monetary policy meeting revealed divisions among officials regarding the future policy direction.
The Dow Jones Industrial Average fell 576.76 points, or 1.09%, closing at 52,348.39. The Nasdaq Composite rose 51.96 points, or 0.20%, to finish at 25,870.65. The S&P 500 index declined 21.14 points, or 0.28%, ending the session at 7,482.71.
Brent crude oil futures surged 5.43% on Wednesday, settling at $78.19 per barrel. West Texas Intermediate crude futures climbed 4.37%, closing at $73.52 per barrel.
Speaking at the NATO summit in Turkey, President Trump remarked, "I think the ceasefire is over. I don't want to deal with them anymore. They're trash." Later on Wednesday, he reiterated threats of military action against Iran, stating, "We're going to hit them hard tonight."
This followed US military strikes on Tuesday, described as "a series of powerful strikes," which were conducted in retaliation for alleged Iranian attacks on three commercial vessels transiting the Strait of Hormuz.
At the NATO summit in Ankara, Turkey, NATO Secretary General Mark Rutte told reporters that the US response was "absolutely necessary." He added, "When you have a ceasefire and Iran is basically violating the ceasefire—we saw what happened yesterday with the ships—I think it's crucial that the US responds forcefully."
The renewed geopolitical tensions in the Middle East boosted energy sector stocks. Shares of ConocoPhillips and Chevron each rose about 1%, while Marathon Oil gained 3%.
Conversely, consumer-related stocks, which could be negatively impacted by rising energy costs, declined. The Home Depot fell 2%, McDonald's dropped over 1%, and Booking Holdings slid 4%.
Semiconductor stocks, which had faced pressure in the prior session, stabilized. The VanEck Semiconductor ETF (SMH) rose over 1%, though it remains about 12% below its recent peak.
Daniela Hathorn, a senior market analyst at Capital.com, noted in a Wednesday morning report, "The renewed tensions in the Middle East have interrupted the market's increasingly complacent narrative, prompting investors to reassess geopolitical risks after weeks of pricing in a smooth de-escalation path."
Hathorn further commented, "The recent attacks serve as a reminder that, despite the ceasefire holding, a lasting US-Iran agreement is far from guaranteed. Markets had grown accustomed to the expectation of the conflict fading into the background, but recent developments suggest this assumption may have been premature."
Simultaneously, the minutes from the Federal Reserve's June meeting—the first chaired by Kevin Warsh—highlighted significant internal disagreement over the future policy path, with uncertainty about the direction of interest rates in the absence of more inflation data.
The minutes noted that "many participants judged that the appropriate level of the federal funds rate would be at or slightly below the current target range by the end of this year," but also stated that "many other participants, however, judged that the appropriate level of the federal funds rate would be above the current target range." The market's reaction to the release of the minutes was relatively muted.
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