US stocks opened lower across all three major indices Wednesday as oil prices surged on renewed Middle East hostilities and traders positioned ahead of the Federal Reserve's interest rate decision. The Dow fell 0.76%, while the S&P 500 slipped 0.23% and the Nasdaq declined 0.19%. Storage stocks rallied on strong earnings from Seagate Technology, while airline shares slumped.
US stocks opened lower, with the Dow falling 0.76%, as oil surged on renewed Middle East hostilities and traders awaited the Federal Reserve's interest rate decision.
US Central Command said Iran's Islamic Revolutionary Guard Corps launched missiles in an attempted surprise attack on US forces, according to a post on X, pushing front-month West Texas Intermediate crude up 4.8% to $83.05 a barrel. Brent crude, the global benchmark, advanced 6.4% to $89.49.
The selloff was led by airline stocks, with American Airlines falling 4%, Delta Air Lines dropping 2% and Alaska Air sliding 2%. Energy stocks bucked the trend, with the Energy Select Sector SPDR ETF gaining 2.3% as Exxon Mobil rose 2.1% and Chevron added 2%. Storage stocks also rallied, with Seagate Technology surging more than 5% after reporting fiscal fourth-quarter adjusted earnings and revenue that surpassed analysts' estimates and issuing a better-than-expected outlook. Western Digital rose more than 2%.
The diverging sector moves reflect competing forces: escalating geopolitical risk pushing energy higher while raising uncertainty for consumer-facing stocks, and a busy earnings calendar that includes results from Microsoft and Meta Platforms after the closing bell. The Federal Open Market Committee is expected to hold its benchmark rate at 3.50% to 3.75% for a fifth straight meeting, with the CME's FedWatch Tool showing a 68.5% probability of no change and a 31.5% chance of a quarter-point increase. The decision is due at 2 pm ET, followed by Chair Kevin Warsh's press conference at 2:30 pm.
Among other notable movers, Vertiv Holdings fell more than 12% after reporting higher second-quarter adjusted earnings and revenue, while Humana dropped 8% after cutting its 2026 GAAP earnings guidance. On the upside, Eni gained more than 5% after reporting higher second-quarter net profit and sales, and UBS rose 1% on better-than-expected quarterly results. Procter & Gamble fell 3.1% after reporting fiscal fourth-quarter net sales that missed analysts' estimates, while KLA declined 8.9% despite a quarterly earnings beat. Visa shares slipped 2.2% despite posting a fiscal third-quarter earnings beat.
Across markets, gold futures slipped 0.2% to $4,090 an ounce, while silver futures rose 0.6% to $57.85. In Asia, Japan's Nikkei closed 1.5% lower, while Hong Kong's Hang Seng ended 2% higher and China's Shanghai Composite finished 0.4% higher. European markets were mixed, with the FTSE 100 up 0.3% and the DAX 0.2% higher. The previous session saw the Dow jump 537 points, or 1%, to 52,747.32, while the S&P 500 added 0.2% to 7,428.78 and the Nasdaq slipped 0.2% to 24,876.91.
This article is for informational purposes only and does not constitute investment advice.
