[New York Stock Exchange] Powell: "Impact of Middle East Situation Uncertain"... All Major Indices Close Down Over 1%

As Israel attacked Iran's South Pars gas field, the world's largest gas field, Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), stated that the impact of the Middle East situation on the U.S. economy is uncertain. As a result, on March 18 (local time), all three major U.S. stock indices closed lower.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 46,225.15, down 768.11 points (1.63%) from the previous trading day. The S&P 500 Index, which focuses on large-cap stocks, declined by 91.39 points (1.36%) to 6,624.70, while the Nasdaq Index, which is centered on technology stocks, dropped by 327.107 points (1.46%) to close at 22,152.421.

The Federal Open Market Committee (FOMC) held the benchmark interest rate steady at 3.50~3.75% per annum. This marks the second consecutive time rates have been left unchanged since January this year. In its statement, the Fed made it clear that "the impact of the Middle East situation on the U.S. economy is uncertain," highlighting the increased uncertainty regarding the inflation path, as international oil prices have surged due to the Iran war.

The dot plot, which drew significant market attention, showed that the median forecast for the policy rate at the end of this year remained at 3.4%. This is interpreted as an outlook for "one rate cut" within the year. However, internally, there was a trend to reduce the number of expected rate cuts. Some committee members shifted their outlook from "two cuts" to "one cut," causing the distribution to move accordingly.

The U.S. Producer Price Index (PPI) for February, released earlier, also rose 0.7% from the previous month. This figure is significantly higher than the market expectation of 0.3%. CNBC reported that this indicates inflation was already unstable before the Iran war.

Todd Schoenberger, Chief Investment Officer (CIO) at Crosscheck Management, pointed out, "The higher-than-expected inflation rate is due to tariffs," adding that prices for metals, industrial raw materials, and manufacturing costs all showed increases.

He analyzed, "This is not a temporary phenomenon, but structural inflation, and it is highly likely to affect monetary policy until the latter part of the third quarter."

International oil prices also ended higher. The news that Israel attacked Iran’s South Pars gas field—the world’s largest gas field—and natural gas facilities in southwestern Iran had an impact.

The May futures price of Brent crude oil, the international benchmark, closed at $107.38 per barrel, up 3.8% from the previous close. During the session, Brent futures even reached as high as $109.95 per barrel. On the New York Mercantile Exchange, the price of West Texas Intermediate (WTI) crude for April delivery closed at $96.21 per barrel, up 0.11% from the previous session.

As the conflict between Iran and Israel intensified, airline stocks all declined. Delta fell by 1.67%, American Airlines by 0.38%, and United Airlines by 0.83%. Refinery stocks were mixed. Exxon Mobil dropped by 0.60%, while Chevron rose by 0.37%.

Technology stocks closed lower across the board. Nvidia fell by 1.03%, Apple by 1.96%, Microsoft by 2.08%, Amazon by 2.70%, Alphabet by 1.24%, Tesla by 1.63%, and Meta by 1.25%.

Anshul Sharma, Chief Investment Officer at Savvy Wealth, pointed out, "We have now entered a period of high market volatility," and added, "If oil prices remain elevated, it will affect the entire economy."

He continued, "Persistent energy shocks leading to inflation and slower growth will be a 'dangerous combination,'" adding, "This will further complicate the Fed’s efforts to balance its policy objectives."

Meanwhile, according to Investing.com, the yield on the 10-year U.S. Treasury note rose 1.52% from the previous session to 4.266%. The yield on the 30-year U.S. Treasury bond also increased by 0.66% to 4.885%.

On the New York Commodities Exchange (COMEX), gold futures for April delivery closed at $4,896.20 per ounce, down 2.2% from the previous session.

This content was produced with the assistance of AI translation services.