The Dow Jones Industrial Average fell for a second straight session on Monday as concerns over geopolitical tensions between Iran and the U.S. remained high following last week’s assassination of a top Iranian military leader.
The 30-stock Dow dropped slightly: 49 points, or 0.2%. The S&P 500 was flat while the Nasdaq Composite traded just above the flatline as the so-called FANG stocks — Facebook, Amazon, Netflix and Google-parent Alphabet — gained.
Monday’s losses in the Dow were in contrast to Friday’s sharp decline. The Dow and S&P 500 had their worst trading day in a month on Friday, the morning after President Donald Trump approved a U.S. airstrike in Baghdad that killed top Iranian Gen. Qasem Soleimani.
The news sparked a bid on oil prices amid worries the conflict could disrupt the world’s oil supply. Crude rallied more than 3% on Friday to its highest level since April. Oil briefly rose more than 1% earlier in Monday’s session before erasing those gains.
Traders work on the floor of the New York Stock Exchange, November 26, 2019.
Lucas Jackson | Reuters
Trump said Sunday he could slap sanctions on Iraq after its parliament passed a resolution calling for the government to expel foreign troops from the country.
“We have a very extraordinarily expensive airbase that’s there. It cost billions of dollars to build. Long before my time. We’re not leaving unless they pay us back for it,” Trump said.
Meanwhile, the Iranian regime said Sunday it would not abide by the uranium-enrichment limits set by the 2015 nuclear deal.
Investors have dumped equities — which were trading at all-time highs — in favor of traditional safe havens such as gold and Treasurys as U.S.-Iran tensions rose.
On Monday, gold futures hit their highest level in more than six years. They traded 0.9% higher at $1,565.70 per ounce. The benchmark 10-year Treasury yield hovered below 1.8% after starting 2020 trading above 1.9%. Yields move inversely to prices.
“Nevertheless, our outlook remains optimistic and bullish,” Ed Yardeni, president and chief investment strategist at Yardeni Research, said in a note. “Geopolitical crises tend to create buying opportunities in the stock market as long as they don’t trigger a recession.”
“We don’t believe that Iran will disrupt oil supplies significantly now that the US has demonstrated a willingness to use lethal force to deter Iran’s mischief-making in the Middle East,” Yardeni added.
Alphabet shares climbed 2.3% after an analyst at Pivotal Research upgraded them to buy from hold. The analyst cited new potential revenue streams under new CEO Sundar Pichai.
Alphabet led the rest of the FANG stocks higher. Facebook and Amazon rose 0.6% and 1.2%, respectively, while Netflix advanced 0.8%.
—CNBC’s Silvia Amaro contributed to this report.
