S&P 500 Snaps Nine-Day Win Streak as Iran-U.S. Tensions Spike

CNBC reported Wednesday that the S&P 500 snapped a nine-session win streak as escalating conflict between the United States and Iran rattled investor sentiment across global markets.

The broad index closed down 0.74% on the day. The Nasdaq Composite shed 0.89%, while the Dow Jones Industrial Average dropped 620.72 points, a decline of roughly 1.21%.

Geopolitical Shock Drives the Sell-Off

The catalyst was a sharp deterioration in Middle East security conditions. Iran struck Kuwait International Airport early Wednesday. A day prior, U.S. Central Command announced it had intercepted Iranian ballistic missiles and drones before conducting what it described as defensive strikes on Qeshm Island in the Persian Gulf. The exchange sent oil prices climbing, lifting Treasury yields alongside them. Higher yields weighed on rate-sensitive equities throughout the session.

Energy stocks were a notable exception to the broad decline. The sector gained 1.38%, finishing as the top performer among all eleven GICS categories. Consumer staples and healthcare followed with modest gains. Technology shares bore the sharpest losses, falling 1.52%, as financials and consumer discretionary names also retreated.

Corporate Earnings Add Pressure After the Bell

Two high-profile earnings reports deepened the gloom in extended trading. Chipmaker Broadcom posted fiscal second-quarter revenue of roughly $22.19 billion, falling short of analyst expectations near $22.27 billion. Its shares dropped around 13% in after-hours trade. Cybersecurity firm CrowdStrike fell approximately 10% after issuing weaker-than-expected second-quarter guidance. Fashion group PVH, parent of Tommy Hilfiger and Calvin Klein, tumbled more than 20% after reiterating full-year guidance that left investors disappointed.

A Breather After a Historic Run

Background: Nine Weeks of Gains Now Face a Test

The S&P 500 had logged nine consecutive weekly advances entering this week, a remarkable stretch by any historical measure. Keith Lerner, Chief Investment Officer and chief market strategist at Truist Wealth, told CNBC’s Closing Bell that some cooling is both natural and overdue. He argued fundamentals remain solid and the bull market still holds merit, but noted that markets typically move two steps forward before one step back. After an unusually extended advance, a brief pause or sideways chop seemed likely, he said.

Asian Markets Open Lower Thursday

The fallout carried into the Asia-Pacific session. Japan’s Nikkei 225 fell 1.74%, reversing from a record high set the day before. Australia’s ASX 200 dropped 1.14%, Hong Kong’s Hang Seng lost 0.93%, and mainland China’s CSI 300 declined 0.84%. South Korea’s Kospi fell 1.25%. S&P 500 futures were pointing down a further 0.43% early Thursday, with Nasdaq 100 futures off 0.57%.

Traders on Thursday will monitor initial jobless claims, final readings on first-quarter unit labor costs, and earnings from Ciena and Brown-Forman before the opening bell.

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