US equity indexes experienced a decline on Monday as crude oil prices surged during midday trading, driven by concerns surrounding a potential meeting between Iran and Russia amid the ongoing crisis in the Middle East. The Nasdaq Composite fell by 0.5%, settling at 18,051.7, while the S&P 500 saw a decrease of 0.4%, closing at 5,729.5.
The Dow Jones Industrial Average dropped 0.6% to a level of 42,097.8. Among the sectors, utilities were notably affected, leading the decliners list, whereas energy and technology sectors managed to post modest gains amidst the overall downturn. The price of West Texas Intermediate crude oil notably surged 3.6%, reaching $77.06 per barrel.
This increase coincides with the anniversary of the terrorist attack on Israel by the Hamas militant group, which occurred on October 7 last year. On the geopolitical front, Russian President Vladimir Putin is set to meet Iranian President Masoud Pezeshkian this Friday to deliberate on the escalating situation in the Middle East, as reported by Russia’s state-run media agency TASS.
In response to these developments, Israel is reportedly coordinating military preparations with the United States to respond to potential Iranian threats. Israeli Defense Minister Yoav Gallant stated, ‘Everything is on the table,’ emphasizing that Israel will maintain discretion in its decision-making processes, even as meetings with US Defense Secretary Lloyd Austin are planned. Further market indicators have shown concern among investors, as evident by the CBOE Volatility Index, often referred to as the fear gauge, which jumped 8.6% to settle at 20.85.
Additionally, US Treasury yields exhibited an upward trend, with the 10-year yield increasing by 4.5 basis points to 4.03%, and the two-year rate climbing 5.9 basis points to reach 3.99%. In company news, Supermicro ($SMCI) stocks soared by 13%, marking it as the top gainer on both the S&P and the Nasdaq.
The company achieved a significant milestone by shipping over 100,000 graphics processing units in just one quarter and introduced an innovative liquid cooling system aimed at data centers that includes cooling towers and advanced management software, enhancing efficiency and reducing overall power and hardware acquisition costs.
Meanwhile, Barnes Group ($B) confirmed its agreement to be acquired by funds managed by affiliates of Apollo Global Management (APO) in a transaction valued at approximately $3.6 billion..