Stock market today: Wall Street is struggling as war worries clash with hopes of higher profits

NEW YORK (`) — U.S. Stocks are mostly falling on Friday as fears of a war in the Middle East clash in financial markets with hopes for higher profits from major U.S. companies.

Oil prices jumped and government bond yields fell after the Israeli military ordered the evacuation of the northern Gaza Strip before an expected ground invasion, said the United Nations, which warned of potentially “devastating humanitarian consequences.” But several of the largest U.S. banks simultaneously said theirs The profits in the summer were better than feared, which gave Wall Street hope a successful reporting season That could deliver the first growth in a year.

All the back and forth sent the S&P 500 down 0.5% in midday trading. The Dow Jones Industrial Average was nearly flat as of midday Eastern Time, and the Nasdaq Composite was down 1.2%.

The biggest moves came in the oil market, where a barrel of benchmark U.S. crude rose 4.5% to $86.63. Brent crude, the international standard, rose 4.3% to $89.67 a barrel.

Although the Gaza region is not a major oil producer, there are fears that the violence could spill over into politics surrounding the crude oil market and eventually lead to disruptions in the flow of oil.

Concerns about the war also caused Treasury yields to fall, which is often the case when investors look for safer assets in times of stress. The yield on the 10-year Treasury note fell to 4.62% from 4.70% late Thursday.

Yields also fell, another Federal Reserve official said The central bank may be done hiking its key interest rate after a vigorous campaign that began early last year.

Philadelphia Fed President Patrick Harker said again Friday that he believes “we’re at the point where we can keep interest rates where they are” as long as economic and financial conditions continue along their current trajectory.

The Fed has raised its federal funds rate to its highest level since 2001, from virtually zero at the start of last year, in hopes of slowing fuel inflation. Inflation has fallen from its peak last summer, but it is still high, raising concerns that interest rates could stay high for longer than Wall Street would like.

High interest rates and longer-term bond yields are driving down prices for all types of investments while slowing the overall economy.

Harker said the Fed can afford to hold off on raising interest rates and wait to see what happens, especially given the many economic uncertainties. In addition to the war in Gaza and oil prices, there are also concerns about the impact of worker strikes across the country and dysfunction on Capitol Hill that could lead to another government shutdown in the US.

“By doing nothing, we are still doing something,” Harker said of keeping interest rates at their high levels. “And we actually do quite a lot.”

The two-year Treasury yield, which tends to track closely with expectations of Fed action, fell to 5.03% from 5.07% late Thursday.

A report on Friday suggested that sentiment may be weakening among U.S. consumers, whose spending has been a key driver in keeping the economy out of recession. According to a preliminary study from the University of Michigan, consumer sentiment has weakened more than economists expected, largely due to rising inflation concerns.

U.S. consumers expect inflation to reach 3.8% next year, up from 3.2% last month. It is the highest value of its kind since May.

Helping to support Wall Street were JPMorgan Chase, Citigroup and Wells Fargo, all of which reported higher summer quarter earnings than analysts expected.

JPMorgan Chase rose 3.3% after third-quarter profit rose 35% from a year earlier. The company benefited from a rise in interest rates, but its CEO Jamie Dimon also warned that “this could be the most dangerous time the world has seen in decades.”

Citigroup rose 2.6% and Wells Fargo rose 3.3% after also beating analysts’ profit expectations in the summer quarter. Bank customers continue to borrow, including at higher interest rates, as consumers charge more and more on their credit cards.

UnitedHealth Group also beat Wall Street’s earnings expectations and its shares rose 2.2%.

Dollar General posted one of the biggest gains in the S&P 500, rising 10%, it said Todd Vasos will return as CEO.

On the losing side of Wall Street were travel companies. Norwegian Cruise Line fell 4.1% and Delta Air Lines fell 2.2%.

Investment giant BlackRock fell 1.2% despite reporting higher profits for the latest quarter than analysts expected.

BlackRock said uncertainty in financial markets and the outlook for interest rates contributed to customers withdrawing some money from long-term investments and stashing it in cash that ultimately pays higher returns.

In overseas stock markets, indices were lower across Europe and much of Asia.

Hong Kong’s benchmark fell 2.3% and stocks in Shanghai fell 0.6%, leading the world’s second-largest country to recover The economy continues to weaken.

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` writer Zimo Zhong contributed.