[New York Stock Market] Tensions With Iran and Private Credit Fears Sink Sentiment... All Three Major Indexes Close Lower

Trump Gives Iran 10-Day Deadline for Talks
War Risk With Iran Weighs on Investor Sentiment
Private Credit Fund Withdrawal Limits Also Add to Market Declines

As tensions between the United States and Iran intensified and concerns over potential distress in the private credit market emerged, investor sentiment froze. On the 19th (local time), all three major U.S. stock indexes in New York closed lower, while oil prices continued their sharp rise.

On the 19th at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 49,395.16, down 267.50 points (-0.54%) from the previous trading day. The large-cap S&P 500 Index fell 19.42 points (-0.28%) to 6,861.89, and the tech-heavy Nasdaq Index declined 70.905 points (-0.31%) to finish at 22,682.72.

The standoff between Iran and the United States heightened market anxiety that day. At the first board meeting of the peace committee established by U.S. President Donald Trump to maintain peace and rebuild the Gaza Strip, he harshly pressured Iran to return to the nuclear negotiation table.

He said, "We need to reach a meaningful agreement with Iran. Otherwise, bad things will happen." Referring to the surprise strike on Iran's nuclear facilities last June using America's state-of-the-art military weapons, President Trump added, "We will probably reach an agreement," and said, "You will probably know the outcome within the next ten days."

Thomas Lee of Fundstrat Global Advisors analyzed, "The increased risk of attacks in the Middle East is dampening investor sentiment in the short term."

Dennis Palmer of Montis Financial predicted, "Iran's military capabilities have been significantly weakened, and it is not in a favorable position in negotiations due to the economic crisis, so there appears to be an expectation for a diplomatic resolution."

Another factor dragging down the indexes was concern related to private credit. Blue Owl Capital decided to restrict redemptions from one of its private credit funds. Shares of Blue Owl Capital fell about 6%, and peers such as Apollo Global Management and TPG also declined.

Walmart, which had previously reported solid fourth-quarter results last year, fell more than 1% in a single day. This was because its annual earnings guidance came in below market expectations.

Meanwhile, on February 20, the December PCE price index will be released. The market expects it to rise 0.3% from the previous month and 2.8% from the same period a year earlier. The PCE is an inflation gauge that the Federal Reserve (Fed) considers important.