Stocks Fall As Heightened Geopolitical Worries Zap Risk Appetite

ft)0{069yfy9l7809w52ukyn_media_dl_1.png BloombergArticle content(Bloomberg) — The comeback in US equities from last week’s artificial intelligence jitters petered out on Thursday as tensions with Iran put traders on edge. Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe S&P 500 Index declined 0.5% as of 12:51 p.m. in New York, while the technology-heavy Nasdaq 100 Index slid 0.6%.

President Donald Trump said the US has to “make a meaningful deal” with Iran as the US military is stationing a vast array of forces in the Middle East, spurring concern across Wall Street around the prospect of escalations. Utilities, energy, industrials, and communications services were the only four sectors up on the day, while financials and information technology led the market lower. Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle content“While there might be some initial volatility from conflict in Iran, we think the markets would look past it pretty quickly,” Dennis Follmer, chief investment officer at Montis Financial, said in an email. “Given the likelihood of a diplomatic solution and that the resulting volatility from an actual armed conflict would be fairly contained, we think any portfolio changes are unwarranted.”Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentLingering worries about AI also continue to weigh on sentiment, with two coalescing fears gripping Wall Street. On one hand, investors have been worried that robust spending by American technology behemoths will fail to deliver the profits necessary to justify the investments, while there’s also concern AI could make a number of industries obsolete. Article contentMarket watchers parsed a bevy of economic data Thursday morning. Applications for US unemployment benefits fell by the most since November, adding to evidence of stabilization in the labor market. The US trade deficit widened in December, capping a turbulent year of erratic tariff policy.Article contentThe S&P 500 has shown signs of a market under pressure, recently trading in a tight range roughly from 6,800 to just under 7,000. Investors have reduced their equity exposure to the lowest level since July, as measured by the National Association of Active Investment Managers’ poll of active money managers.Article contentArticle contentMeantime, the equal-weighted version of the guage is up nearly 6% year-to-date as investors seek opportunities beyond large-cap tech stocks. Morgan Stanley’s chief investment officer and chief US equity strategist Mike Wilson said that market broadening is happening now as the US economy and market begin a new cycle. Article content“There have been many parts of the economy that have been sort of mired in a recession for the last three years or so, and they’re just now starting to emerge,” Wilson said in a Wednesday interview with Bloomberg Television.Article contentWalmart Inc., a bellwether for the US consumer, issued a forecast for full-year earnings that missed higher expectations, flagging the unpredictable state of trade and labor market conditions.Article contentAt the end of the fourth quarter, mega-cap tech stocks were the most under-owned relative to their weightings in the S&P 500 in 17 years, according to Morgan Stanley analysis citing 13-F filings. Elsewhere, a separate analysis from Goldman Sachs Group Inc. found roughly 57% of large-cap mutual funds are outperforming their benchmarks year-to-date, the highest percentage since 2007.Article contentIn individual movers, Deere & Co. shares jumped as the world’s largest farm-machinery maker boosted its annual profit outlook, anticipating a long-awaited upturn in the agriculture economy. Carvana Co. slumped after signaling some growing pains in its push for rapid growth as the company’s higher costs hit margins in the latest quarter and sent shares tumbling.Article contentTrending Posthaste: CIBC warns Canada's housing market is in rougher shape than we thought News What's new in 2025 for Canadians filing tax returns Taxes Garry Marr: For young Canadians who bought at peak of market, Home Buyers' Plan was invitation to disaster First-Time Homebuyers Seafood billionaire John Risley’s firm faces huge debt, legal battles amid ownership shakeup Finance Posthaste: Canada's biggest city is losing momentum, and that's a problem for the whole country News Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. 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