Investing.com – U.S. stocks fell sharply on Tuesday amid fears of a sharp escalation in tensions in the Middle East, shedding some of the previous month's gains pending a host of major economic data.
At 09:50 CET (1350 GMT), the dollar was down 250 points, or 0.6%, trading 40 points, or 0.7%, lower, while it fell 170 points, or 1%.
Wall Street's three major averages advanced in both September and the third quarter, the first positive September for the S&P 500 since 2019.
The S&P 500 is up more than 20% this year – the first time since 1997 that the benchmark index has risen 20% or more during the first nine months of the year.
Will Iran launch an attack on Israel?
Axios reported on Tuesday that Iran was preparing a ballistic missile attack on Israel, a move that risks escalating a conflict in the oil-rich Middle East that threatens to engulf major regional powers as well as the United States.
This comes after Israeli troops began “limited” raids against Hezbollah targets in Lebanon's border area.
At 09:50 ET, the contract was up 2.8% at $73.71 per barrel, while futures (WTI) were trading 2.6% higher at $69.94 per barrel.
Separately, the industry group will reveal its weekly estimate of US crude oil and fuel stocks in the week to September 27.
Powell controls expectations of big cuts
The new month had already begun with Wall Street on the defensive after the head of the Federal Reserve checked expectations for another sharp rate cut this month, saying the committee does not feel “in a rush to cut rates quickly” and that the process of reducing the federal funds rate “will unfold over time.”
Goldman Sachs strategists said they consider Powell's comments “consistent with our forecast for 25 basis point cuts in November and December.”
“We continue to consider that the choice between 25 bp and 50 bp in November is very close,” they added.
The Federal Reserve began its policy shift last month with a 50 basis point rate cut, marking the first reduction since 2020.
Lots of economic data
There is more US economic data to study as investors look for more clues on how the Fed approaches further potential rate cuts this year.
The closely watched report, or Job Openings and Labor Turnover Survey, is expected to show there were 7.64 billion jobs available in August.
Investors will also examine the September reading of the Institute for Supply Management and purchasing managers' indices this week for more signs of momentum in the U.S. economy.
The week ends with the release of the October report on Friday, and economists expect the U.S. economy to have added 144,000 jobs.
CVS Health weighs options
On the corporate front, shares of CVS Health (NYSE fell 1.7% after Reuters reported that the company is considering options that would include splitting its retail and insurance divisions.
Citing people familiar with the matter, the news agency said CVS Health has been discussing various options, including the split process, with its financial advisors in recent weeks.
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