Stocks Slip Early as Middle East Ceasefire Risks Lift Oil, Gold Prices

U.S. stocks traded modestly lower early Thursday as rising geopolitical tensions in the Middle East pushed oil sharply higher and drove investors toward safe-haven assets. The Dow Jones Industrial Average fell 100.60 points to 47,809.3, while the S&P 500 slipped 7.25 points to 6,775.56 and the Nasdaq Composite declined 21.61 points to 22,613.4. And just before 10 AM ET, indexes were off their morning lows.

The primary driver of market sentiment was renewed uncertainty around a potential Iran war ceasefire. Bloomberg reported that Israel issued evacuation warnings to residents in Beirut suburbs ahead of planned strikes, even as Iran’s president warned that continued attacks could render ceasefire talks “meaningless.” The developments heightened concerns that negotiations could collapse, injecting a fresh geopolitical risk premium into energy markets.

Crude oil surged 4.89, or 5.18%, to 99.30, reflecting fears of supply disruption across the region. Gold also climbed 15.90, or 0.33%, to 4,793.10, hovering near record levels as investors sought safety. The CBOE Volatility Index rose modestly to 21.09, signaling elevated but contained market anxiety.

Equities showed relative resilience despite the geopolitical backdrop. Major indexes opened weaker but avoided sharper losses, suggesting investors are balancing risk concerns against still-stable domestic economic conditions.

That domestic backdrop was shaped by the latest inflation data from the Bureau of Economic Analysis. The Personal Consumption Expenditures (PCE) price index rose 0.4% in February from the prior month and increased 2.8% year-over-year. Core PCE, which excludes food and energy, also rose 0.4% on the month and 3.0% annually, indicating persistent underlying inflation pressures.

Consumer activity remained firm. Personal outlays increased by $106.5 billion, driven by a $103.2 billion rise in spending, split between goods ($58.7 billion) and services ($44.5 billion). However, personal income declined, reflecting reduced dividend income and transfer payments, while the savings rate held at 4.0%.

Commodity inflation remains a growing concern beyond energy markets.

Analysts at Apollo Global Management, led by Torsten Slok, highlighted rising ground beef prices driven by a historically tight U.S. cattle herd, elevated feed and energy costs, and resilient consumer demand. These pressures are reinforcing broader food inflation trends already captured in the PCE data .

Looking ahead, investors are likely to remain focused on geopolitical developments in the Middle East and upcoming CPI readings, both of which could shape expectations for Federal Reserve policy in the weeks ahead.