US Stocks Slightly Fall from Record Highs, Iran Escalation Raises Energy Inflation Risk
US stocks fell slightly from their record highs on Monday (May 4), as the escalating conflict with Iran raised the risk of prolonged high energy prices. The S&P 500 and Nasdaq 100 fell about 0.3% from their peaks, while the Dow Jones Industrial Average fell nearly 200 points.
The pressure came after Tehran claimed two US warships were attacked, shortly after President Donald Trump announced the US would escort commercial vessels through the Strait of Hormuz. However, US officials denied the attack reports, although uncertainty about the security of the energy route continues to keep market sentiment fragile.
The continued rise in energy commodity prices deepens inflation risks, which are seen as forcing the Federal Reserve to maintain its tight policy stance for longer. This narrative strengthened after last week's Fed meeting was marked by several hawkish dissents, leading the market to reassess the possibility of persistently high interest rates.
Large-cap technology stocks led the decline, as they are more sensitive to changes in risk sentiment, particularly amid speculative positions related to AI themes. Tesla, MetaTrader, and Alphabet fell by around 1%, emphasizing a defensive rotation as geopolitical risks increased.
In the financial sector, Visa, JPMorgan, and Goldman Sachs fell slightly amid rising long-term yields. Berkshire Hathaway also weakened despite higher earnings, while Palantir strengthened ahead of its earnings release after the market close.
Source: Newsmaker.id
