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BENGALURU:
Wall Street’s major indexes fell 1% on Thursday, with financial stocks taking a blow, as a surge in oil prices towards $100 a barrel rekindled inflation fears and investors kept a close watch on mounting jitters in the private credit sector.
Crude prices jumped after two tankers were set ablaze in Iraqi waters in apparent Iranian strikes, as part of wider attacks on oil and transport facilities across the Middle East. Iranian Supreme Leader Mojtaba Khamenei said the Strait of Hormuz should remain closed as a tool of pressure.
S&P 500 airline stocks, highly sensitive to fuel costs, fell 3.4% and are on track for their biggest monthly losses in a year. Cruise operators Norwegian and Royal Caribbean also fell more than 2.5%.
Energy companies Occidental gained 3.3% and ConocoPhillips rose over 1.4%.
Investors are also scrutinising the roughly $2 trillion private credit market following a string of credit issues that have surfaced in recent months and Swiss private equity firm Partners Group warned private credit default rates could double in the next few years.
Morgan Stanley fell 4.3% after limiting redemptions at one of its private credit funds following similar actions by Blackstone and BlackRock earlier this month. Blackstone and BlackRock were down over 1% each. JPMorgan Chase of some loans to private credit funds on Thursday. The broader S&P 500 financials sector dropped 1.5%, with banks Citigroup and Goldman Sachs down over 3%.
